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As our community adjusts to the impacts of the COVID-19 health crisis, the EDC is working closely with local, state and federal partners to identify opportunities to assist our business community. We realize information regarding resources and programs associated with the COVID-19 health crisis is vast. Our goal with this communication is to focus on one program, the Paycheck Protection Act.
Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover up to 8 weeks of payroll and other certain expenses through existing SBA lenders. In addition, there is a provision for loans to be fully forgiven. If you are not aware of the PPP program, please see the overview information below or click here for the most current information.
This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19.
Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.
Small businesses in the hospitality and food industry with more than one location could also be eligible at the store and location level if the store employs less than 500 workers. This means each store location could be eligible.
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.
Lenders may begin processing loan applications as soon as April 3, 2020.
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
This loan has a maturity of 2 years and an interest rate of .5%.
In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are currently eligible to other forms of disaster assistance at www.sba.gov.
SpaceCoastEDC.org • 6525 3rd Street, Suite 304 • Rockledge, FL 32955 • (321) 638.2000
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