Although Friday marked the day when small businesses are able to apply for Payroll Protection Program loans, many banks were saying that they weren’t ready for the rollout.
JP Morgan Chase, and other banks, emailed customers last Thursday night saying that they were not yet ready to start taking applications for the program.
“Some new guidance was released late on Thursday evening from the SBA and Treasury in the form of a 31-page document, “literally hours before it starts,” and banks are moving “heaven and earth to get a system in place and running to help America’s small businesses and the millions of men and women who work at them,” Richard Hunt, head of the Consumer Bankers Association, told CNBC.”
Here’s what we know right now:
Can I go to any bank to apply to the Paycheck Protection Program?
Businesses can apply through any existing SBA 7(a) lender, which currently includes more than 1,800 banks. The program is also expanding to other traditional banks, credit unions, and Farm Credit System institutions, so check with your local bank to find out if they deal with SBA 7(a) loans and the PPP program.
When can I apply for a PPP loan?
April 3rd is when small businesses and sole proprietorships can begin to apply for loans. Starting April 10, independent contractors and self-employed individuals can apply and loans will be given on a first-come, first-served basis.
Will they check my credit?
Current guidelines show that there is no direct guidance on credit requirements.
What documents will I need to apply for a PPP loan?
“Small businesses will need to provide documentation (including payroll documentation) “verifying the number of full-time equivalent employees on payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight week period following this loan will be provided to the lender,” per the SBA.”
What if I have other outstanding loans?
Current outstanding loans should not affect the PPP loan.
How much can I borrow through a PPP loan?
Small businesses can borrow up to 2.5 times their average monthly payroll from the previous year capped at $100,000 per employee and $10 million per business.
What can I use a PPP loan for?
The loan can be used for payroll costs and benefits, including vacation, parental, family, medical and sick leave, health and retirement benefits, and state and local taxes.
How much will I have to pay back?
The loan will be forgiven if the money is used as outlined.
How long will it take to get the money?
The short answer is they aren’t sure yet.
What are the fees?
There are no fees associated.
What if I’ve already laid off some of my staff? Will my loan be forgiven?
To qualify for full loan forgiveness, companies need to maintain pre-crisis levels of full-time employees.
“According to the SBA, small businesses have “until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020” for forgiveness of the loan.”