- This is the loan that goes directly through the SBA website (not the banks).
- You’ll see information about a loan advance of up to $10,000. If approved, the loan advance can be forgiven. The amount of the advance is determined by the number of your pre-disaster (Jan. 31, 2020) employees. The Advance will provide $1,000 per employee up to a maximum of $10,000.
- Applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis.
- The SBA’s Economic Injury Disaster Loan provides vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of the COVID-19 pandemic.
- This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by COVID-19.
Paycheck Protection Program (PPP): This is the program that goes through local participating banks. Connect with your local banker about applying to this program. Review the information below, which includes some tips.
- This loan is designed to provide a direct incentive for small businesses to keep their workers on the payroll.
- 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. At least 75% of the forgiven amount must be used on payroll.
- Loan payments will also be deferred for six months.
- No collateral or personal guarantees are required.
- Neither the government nor lenders will charge small businesses any fees.
- This loan has a maturity of 2 years and an interest rate of 1%.
- The amount of forgiveness of a PPP loan depends on the borrower’s payroll costs over an eight-week period. The eight-week period begins on the date the lender makes the first disbursement of the PPP loan to the borrower.
- Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
- Helpful information for providing documentation about employment numbers and payroll costs:
- In general, borrowers can calculate their aggregate payroll costs using data either from the previous 12 months or from calendar year 2019. For seasonal businesses, the applicant may use average monthly payroll for the period between February 15, 2019, or March 1, 2019, and June 30, 2019. An applicant that was not in business from February 15, 2019 to June 30, 2019 may use the average monthly payroll costs for the period January 1, 2020 through February 29, 2020.
- Borrowers may use their average employment over the same time periods to determine their number of employees, for the purposes of applying an employee-based size standard. Alternatively, borrowers may elect to use SBA’s usual calculation: the average number of employees per pay period in the 12 completed calendar months prior to the date of the loan application (or the average number of employees for each of the pay periods that the business has been operational, if it has not been operational for 12 months).
If you wish to begin preparing your application, you can download a copy of the PPP borrower application form to see the information that will be requested from you when you apply with a lender.
Need help getting started?
Click this link from the Small Business Development Center with an excellent comparison of the programs. You can also watch one of their recorded webinars by clicking here.
