Small businesses and sole proprietors can apply for Small Business Administration loans under the Paycheck Protection Program beginning Friday, April 3, 2020, through existing Small Business Administration (SBA) lenders. Independent contractors and self-employed individuals will be able to apply for loans beginning Friday, April 10, 2020.
Currently, the application is available here. You can complete it in advance to have all necessary information and documentation ready to submit to your local SBA lender.
To apply for a Paycheck Protection Program loan, small business owners must certify in good faith that the current economic crisis makes the loan necessary to support ongoing operations and the funds will be used to retain workers and maintain payroll. The loan proceeds must go toward eligible small businesses expenses, primarily included payroll costs, to be forgiven.
The best way to find an existing SBA lender is to contact your local financial institutions, including credit unions, today to learn if they will be participating. SBA-participating lenders also will be able to give exact details about how they will accept and process applications. You can contact your SBA regional office to find participating lenders in your area.
The U.S. Treasury Department is requiring lenders verify the following information:
- the borrower was in operation on Feb. 15, 2020;
- the borrower had employees for whom the borrower paid salaries and payroll taxes; and
- the dollar amount of average payroll costs.
The Bank Secrecy Act requirements still apply for the lender verification of the borrower’s eligibility. Borrowers should have tax documents and other relevant materials prepared to submit with their application to verify this information.
Borrowers will not be charged a fee to apply for the loan. The federal government will guarantee all Paycheck Protection Program loans and the borrower will not be asked for collateral for the loan.
These loans are standardized with the same terms for all borrowers. They will be forgiven if the employer maintains employment numbers or rehires terminated employees.
Please click Here to read an overview of the program. and Here to determine if this program is appropriate for your business, and a 3rd link is the application itself. The application opening date is tomorrow, April 3rd, 2020, and there will be a lot of business’s signing up. Most local banks are processing these loans, and it is advisable to work with your current banker if possible to stream line the process.
Tanner Insurance Agency wants to help you and your business as much as possible during these difficult times, so please feel free to contact us.