Immediate steps one should take in obtaining a loan under the Paycheck Protection Program.
Do you qualify? Yes, if you are:
Negatively impacted by Covid-19 (will be determined by your lender), and
Have fewer than 500 employees, or
A NAICS code number beginning with 72 (Accommodations and Food Service), having fewer than 500 employees per location.
Go to the decision maker:
The SBA has delegated the authority to approved lenders,
If your bank is currently making SBA loans, the bank is an approved Lender under the program
Call your banker, ask about their process and make an appointment.
Amount one can borrow is 2.5 times average monthly payroll costs for the twelve month period from date of approval/application, not to exceed $10,000,000,
Payroll costs is defined as the sum of: salary, wage, commissions, or similar compensation; tips or equivalent; payment for vacation, parental, family,
medical or sick leave; allowance for dismissal or separation; payment for group healthcare benefits, including insurance premiums; payment of State
or local tax assessed on the compensation of employees; and payment of retirement benefits.
The above shall not include: annual compensation of an individual in excess of $100,000; taxes imposed or with under under Chapter 21 of the Internal
Revenue Code (FICA) during the "covered period" (defined as February 15, 2020 to June 30, 2020); any compensation of an employee whose principal
place of residence is outside the United States; qualified sick leave wages and family leave wages of which a credit is allowed under the Families
First Coronavirus Response Act.
For sole proprietor or independent contractor: the sum of payments of any compensation that is a wage, commission, income or net-earnings that in not
more than $100,000.
Use of proceeds:
Costs related to continuation of group health care benefits during periods of paid sick, medical or family leave and insurance premiums;
Payment of interest on mortgage debt excluding any prepayments;
Interest on any other debt obligations that were incurred prior to the "covered period".
Collateral and personal guarantees are NOT required;
Potential for debt forgiveness subject to adjustments based on employee and salary level retention;
Non-forgiven debt will have a term of 10 years at a rate not greater than 4.0%.