SBA Releases First Conforming Guidance for PPP Flexibility Act
- The Paycheck Protection Program Flexibility Act was signed into law by the President on June 5, 2020.
- Guidance issued by the SBA on June 10 clarified key provisions of the PPP Flexibility Act that were ambiguous.
- As of June 12, 2020, $129 billion in PPP funds remain available.
- The SBA and Treasury have stated that guidance in the form of a new loan application, new loan forgiveness applications, new IFRs, and new FAQs will be forthcoming.
- You may want to consider waiting to submit your forgiveness package.
For all program information and to find a lender, visit www.sba.gov/paycheckprotection.
- Summary of Program: The SBA PPP is a new federal $350 billion loan program administered by the SBA that provides loans up to 2.5 months' worth of payroll cost up to $10 million for small businesses, self-employed people, sole proprietors, independent contractors and gig workers to maintain payroll during the COVID-19 pandemic. If the loans are used for eligible uses and employers maintain payroll for eight weeks after the loans are dispersed the loan will be forgiven.
- Why this might make sense for you: If a self-employed person needs compensation or a business or nonprofit needs funds for employee compensation, including: salaries, wages, commissions, or similar compensation; cash tips or equivalents; vacation, parental, family, medical, or sick leave; payment required for providing group health care benefits (including insurance premiums); payment of retirement benefits; and payroll taxes. Funding may also be used for payment of interest on mortgage obligations, rent, utilities, and interest on pre-existing debt obligations. At least 75% of the funds must be used for payroll for the loan to be forgiven 100%. Unforgiven portions of the loan will have 1% be deferred 12 months and have a terms up to 10 years.
- How to Apply. You will apply directly with a local lender. We advise you start with your existing lender as they may already be participating in the program or can refer to a participating lender. You can also find a lender here.
Paycheck Protection Program FAQs
US Chamber of Commerce Small Business Guide and Checklist
- Summary of Program: SBA Express Bridge Loans is new federal program through the SBA that enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly that can be repaid in full or in part by proceeds from the EIDL loan.
- Why this might make sense for you: If you are a small business owner with an existing relationship with an SBA Express Lender these loans can quickly provide vital economic support your business to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan.
- How to apply: Apply directly with your existing lender.
SBA Debt Relief
- Summary of Program: If you have a current or SBA 7(a), 504 or microloan the SBA will automatically pay the principal, interest, and fees for a period of six months. This also applies to new loans issued prior to September 27, 2020.
- Why this might make sense for you: It provides immediate financial relief on current SBA debt with no penalties or interest or additional obligations.
- How to apply: It is automatically applied for all eligible SBA 7(a), 504 or microloans.