By Mitchell Plimmer
SBA & Treasury Department Press Release
In a press release dated March 31, 2020, the Small Business Administration (the "SBA") and the Treasury Department released additional details regarding the Paycheck Protection Program (the "PPP"), the new loan program aimed to provide relief to small businesses during the current COVID-19 pandemic. Notable updates:
- The SBA and the Treasury Department expect to have the PPP up and running by this Friday, April 3rd.
- The PPP loans will be forgivable in an amount equal to payroll costs and other designated business operating costs incurred by the business in the eight (8) weeks following the business's PPP loan origination date. However, due to likely high levels of participation in the PPP, it is anticipated that not more than 25% of the forgiven amount may be for designated non-payroll costs.
- Other than the PPP loan amount (which is determined according to a formula on a case-by-case basis), each PPP loan will have several identical features, notably:
- Interest rate of 0.5%.
- Maturity of 2 years.
- First payment deferred for six (6) months.
The full press release can be read here: https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/349-billion-emergency-small-business-capital-cleared-sba-and-treasury-begin-unprecedented-public?utm_medium=email&utm_source=govdelivery.
How to Apply
The SBA's PPP website (provided below) states that businesses can apply for a PPP loan through any existing SBA lender or through any participating federally insured depository institution, federally insured credit union, or Farm Credit System institution. Other regulated lenders will be available to make PPP loans once they are approved and enrolled in the program. Businesses should consult with their lender of choice to determine whether it is participating in the PPP. According to the SBA, lenders may begin processing PPP loan applications as soon as April 3, 2020.
It is anticipated that more details and guidance regarding the PPP will continue to be released in the coming days and weeks. Watch for continued updates from Bradley & Riley PC, and visit our website to contact an attorney directly or call us at 319-363-0101 with questions.