Starting April 3, small businesses and organizations with fewer than 500 employees may apply for the Federal Paycheck Protection Program.
Many specifics of the program are still unknown. Here’s what we do know:
The program: Eligible recipients may qualify for a loan up to $10 million determined by eight weeks of prior average payroll plus an additional 25% of that amount. Loan payments will be deferred for six months. If you maintain your workforce, SBA will forgive the portion of the loan proceeds that are used to cover the first 8 weeks of payroll and certain other expenses following loan origination. Salaries of $100,000 or greater will be capped at $100,000.
Eligibility: Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.
The application process: Submit an application through your bank. The bank must be a SBA 7(a) lender, federally insured depository institution, federally insured credit union or Farm Credit System institution. The application is lengthy; expect to spend at little over two hours completing it.