Small Business Paycheck Protection Program
Small businesses across the country are feeling the brunt of the Coronavirus Pandemic. Most states asked non-essential businesses to shut their doors about 3 to 4 weeks ago. Now owners and employees are seeing a serious cash-flow issue. Several organizations are offering help including the Federal Government. Congress just passed the CARES (Coronavirus Aid, Relief and Economic Security) Act.
The legislation details a litany of ways to assist U.S. citizens including a Small Business Paycheck Protection Program. It provides small businesses with funds to pay up to 8 weeks of payroll costs, including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities. It is offered as a loan, but will be fully forgiven if 75% of the cash goes to payroll. Payments will be deferred for 6 months, without fees. The loan forgiveness is based on the employer keeping or quickly rehiring employees and keeping salaries the same.
Non-profits, self-employed individuals, sole proprietorships, veteran organizations and independent contractors with 500 employees or less, are eligible. Some industries with more than 500 workers, qualify too. You can apply right now through a small business lender, but there is a cap on the spending. All participating lenders are listed on www.sba.gov.
The Paycheck Protection Program is implemented by the Small Business Administration with support from the Department of the Treasury.
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