The Coronavirus Aid, Relief, and Economic Security (CARES) Act amends the Small Business Act to create a new Paycheck Protection Program (PPP). This program allows essentially any business or nonprofit with fewer than 500 employees to obtain low-interest, no-collateral loans from the U.S. Small Business Administration through June 30, 2020, to cover operating costs.
Now is the time for small businesses, sole proprietorships, independent contractors and self-employed individuals to become familiar with the application process for the PPP. The PPP authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis.
Local banks are still waiting on their rules, but you can begin talking to your lender now. Here is a fact sheet for borrowers to review before meeting with your lender.
Although the program is open until June 30, the SBA encourages those who are eligible to apply as quickly as possible. There is a funding cap and lenders need time to process your loan.
When can you apply?
Starting April 3, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
Starting April 10, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.