This FAQ was derived from the U.S. Senate Committee on Small Business & Entrepreneurship “The Small Business Owner’s Guide to the CARES Act” and modified by blum.
This FAQ was derived from the U.S. Senate Committee on Small Business & Entrepreneurship “The Small Business Owner’s Guide to the CARES Act” and modified by blum.
Affiliation rules become important when the SBA is deciding whether a business’s affiliations preclude them from being considered “small.” Generally, affiliation exists when one business controls or has the power to control another or when a third party (or parties) controls or has the power to control both businesses. Please see this resource for more on these rules and how they can impact your business’s eligibility.
In general, 501(c)(3) and 501(c)(19) non-profits with 500 employees or fewer as most non-profit SBA size standards are based on employee count, not revenue. You can check here.
Depending on your business’s situation, the loan size will be calculated in different ways (see below). The maximum loan size is always $10 million.
For any amounts not forgiven, the maximum term is 10 years, the maximum interest rate is 4 percent, zero loan fees, zero prepayment fee (the SBA will establish application fees caps for lenders that charge).
Forgiveness on a covered loan is equal to the sum of the following payroll costs incurred during the covered 8-week period compared to the previous year or time period, proportionate to maintaining employees and wages (excluding compensation over $100,000):
Payroll costs plus any payment of interest on any covered mortgage obligation (not including any prepayment or payment of principal on a covered mortgage obligation) plus any payment on any covered rent obligation plus any covered utility payment.
You must apply through your lender for forgiveness on your loan. In this application, you must include:
Any loan amounts not forgiven are carried forward as an ongoing loan with maximum terms of 10 years, at 4% maximum interest. Principal and interest will continue to be deferred for a total of 6 months to a year after disbursement of the loan. The clock does not start again.
No, an entity is limited to one PPP loan. Each loan will be registered under a Taxpayer Identification Number at the SBA to prevent multiple loans to the same entity.
All current SBA 7(a) lenders are eligible lenders for PPP. The Department of Treasury will also be in charge of authorizing new lenders, including non-bank lenders, to help meet the needs of small business owners.
You can call your bank or find SBA-approved lenders in your area through SBA’s online Lender Match tool. You can call your local Small Business Development Center or Women’s Business Center and they will provide free assistance and guide you to lenders.
Borrowers may apply for PPP loans and other SBA financial assistance—including EIDLs, 7(a) loans, 504 loans, and microloans—and also receive investment capital from Small Business Investment Corporations (SBICs).
Emergency Economic Injury Grant recipients and those who receive loan payment relief through the Small Business Debt Relief Program may apply for and take out a PPP loan. Refer to those sections for more information.
Applicants are eligible to apply for the PPP loan until June 30th, 2020.
Yes, you can take out a state bridge loan and are still be eligible for the PPP loan.
Between February 15, 2020 and June 30, 2020, no personal guarantee is required for the covered loan and no collateral is required for the covered loan.
There will be no recourse against any individual, stockholder, member or partner of an eligible recipient of a covered loan for nonpayment of any covered loan unless it is used for a purpose not authorized.
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Disclaimer: Any written tax content, comments, or advice contained in this article is limited to the matters specifically set forth herein. Such content, comments, or advice may be based on tax statutes, regulations, and administrative and judicial interpretations thereof and we have no obligation to update any content, comments or advice for retroactive or prospective changes to such authorities. This communication is not intended to address the potential application of penalties and interest, for which the taxpayer is responsible, that may be imposed for non-compliance with tax law.
Disclaimer: The contents of this resource are for general informational purposes only. While every effort has been made to ensure its accuracy, the information is provided “as is” and no representations are made that the content is error-free. We have no obligation to update any content, comments or other information for retroactive or prospective interpretations or guidance provided by regulators, financial institutions or others. The information is not intended to constitute legal advice or replace the advice of a qualified professional. There are areas of the CARES Act where additional clarification from the Treasury Department and the SBA is needed. Your judgment and interpretation of the act may be needed. Users should consult with their legal counsel and representatives of the lending institution regarding the proper completion of their application and supporting documentation