The Coronavirus Aid, Relief, and Economic Security Act (CARES) was signed into law on Friday, March 27, 2020.
A key element of the bill is the Paycheck Protection Program (PPP). The PPP has been established to allow for loans to small businesses with fewer than 500 employees — including nonprofits — of up to $10 million to be used to defer the costs of keeping employees on the payroll or adding employees and other expenses.
Loan Amounts & Forgiveness
Up to eight weeks of average payroll, mortgage interest, rent, and utility payments can be forgiven if the business retains its employees and their salary levels. Principal and interest payments can be deferred for up to a year, and all SBA borrower fees are waived. This temporary emergency assistance through the U.S. Small Business Administration (SBA) and the Department of Treasury can be used in coordination with other COVID-financing assistance established in the law or any other existing SBA loan program. This relief is available for 501(c)(3) nonprofits, 501(c)(19) veterans organizations, or Tribal businesses with not more than 500 employees who were in operation on February 15, 2020.
Here are some of the payroll expenses you can utilize PPP loan funds for:
- Salary or wages, payments of cash tips
- Vacation, parental, family, medical and sick leave
- Health and retirement benefits
- State and local taxes
Of note: PPP loans will not come directly from the SBA. Individual lenders, including many banks, online lenders, and credit unions will make SBA guaranteed loans as part of their programs.
How to Apply:
Contact your local lender or visit the SBA website to find a local branch representative to answer any additional questions.