The CARES Act expands the availability of small business loans under Section 7(a) of the Small Business Act to include the new Paycheck Protection Program. The proceeds of these loans may be used for payroll costs, mortgage interest, rent, utilities and interest on certain other debt. Up to 100% of these loans may be forgiven, subject to certain restrictions.
Eligibility includes any business with fewer than 500 employees including Sole Proprietors. The requirements to provide collateral and a personal guarantee have been waived. Interest rates may not exceed 4%. The maximum amount to be borrowed cannot exceed $10 million or 2.5 times the average total monthly payroll.
These SBA loans are 100 percent federally-backed loans for certain payroll expenses through June 30, with up to eight weeks of forgiveness for small businesses, certain nonprofits and self-employed individuals. The loans are forgivable if employers retain employees at comparable salary levels prior to the crisis. The Paycheck Protection Program also waives all SBA fees and provides deferral on loan repayments for a minimum of six months up to a maximum of one year.
For more details please refer to The Small Business Owner’s Guide to the CARES Act
You may also call us at (513) 752-2393 or Text (410) 937-9933 for more information.