SBA Paycheck Protection Program
The Paycheck Protection Program is re-opening for First Draw Loans on January 11, 2021. On January 13, 2021, the PPP will be accepting applications from Second Draw PPP Loans.
The SBA's Paycheck Protection Program (PPP) is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest or utilities. Eligible businesses include those with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), 501(c)(3) non-profit organization, 501(c)(19) veterans organizations, or Tribal business concern (sec. 31) (b)(2)(C) affected by COVID-19. Any business with NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location.
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. You should consult with your local lender as to whether it is participating in the program. Find a list of lenders participating in the Paycheck Protection Program by zip code.
PPP Loan Forgiveness
Borrowers may be eligible for PPP loan forgiveness if the funds were used for eligible payroll costs, payments on business mortgage interest payments, rent, or utilities during either the 8- or 24-week period after disbursement. A borrower can apply for forgiveness once it has used all loan proceeds for which the borrower is requesting forgiveness. Borrowers can apply for forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred and borrowers will begin making loan payments to their PPP lender.
SBA Economic Injury Disaster Loan
The Economic Injury Disaster Loans can provide vital economic support to eligible small businesses and agricultural businesses to help overcome the temporary loss of revenue they are experiencing. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. Agricultural businesses includes those businesses engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries (as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)). Small businesses include those businesses with no more than 500 employees. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%.