Guide to Small Business COVID-19 Emergency Loans
The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program (PPP), the initiative provides 100% federally guaranteed loans to small businesses.
Importantly, these PPP loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.
The administration’s PPP program guidelines can be found at www.treasury.gov, and the U.S. Small Business Administration's search tool to find a bank that offers PPP loans can be found at https://www.sba.gov/paycheckprotection/find.
The U.S. Chamber of Commerce has issued this step-by-step guide to help small businesses and self-employed individuals check eligibility and prepare to apply for a loan. Here’s what you need to know.
Here are the questions you may be asking—and what you need to know.
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating.
While the program is open until June 30, 2020, the government is advising borrowers to apply as soon as possible given the loan cap on the program.
1. Am I eligible?
You are eligible to apply for a PPP loan if you are:
In addition, some special rules may make you eligible:
2. What will lenders be looking for?
Borrowers will need to complete the Treasury Department's PPP Loan Application (PDF) and payroll documentation.
Lenders will also ask you for a good faith certification that:
If you are an independent contractor, sole proprietor, or self-employed individual, lenders will also be looking for certain documents (final requirements will be announced by the government) such as payroll tax filings, Forms 1099-MISC, and income and expenses from the sole proprietorship.
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