Following President Trump’s signing of the historic Coronavirus Aid, Relief, and Economic Security (CARES) Act, SBA Administrator Jovita Carranza and Treasury Secretary Steven T. Mnuchin announced that the SBA and Treasury Department have initiated a robust mobilization effort of banks and other lending institutions to provide small businesses with the capital they need.
The CARES Act establishes a new $349 billion Paycheck Protection Program. The Program will provide much-needed relief to millions of small businesses so they can sustain their businesses and keep their workers employed.
The new loan program will help small businesses with their payroll and other business operating expenses. It will provide critical capital to businesses without collateral requirements, personal guarantees, or SBA fees – all with a 100% guarantee from SBA. All loan payments will be deferred for six months. Most importantly, the SBA will forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll costs, rent, utilities, and mortgage interest.
The Paycheck Protection Program is specifically designed to help small businesses keep their workforce employed. Visit http://www.
- The new loan program will be available retroactive from Feb. 15, 2020, so employers can rehire their recently laid-off employees through June 30, 2020.
- Attached are the Payroll Protection Program loan related documents, along with a fact sheet on the program.
Loan Terms & Conditions
- Eligible businesses: All small businesses, including non-profits, Veterans organizations, Tribal concerns, sole proprietorships, self-employed individuals, and independent contractors, with 500 or fewer employees, or no greater than the number of employees set by the SBA as the size standard for certain industries
- Maximum loan amount up to $10 million
- Loan forgiveness if proceeds used for payroll costs and other designated business operating expenses in the 8 weeks following the date of loan origination (due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs)
-
All loans under this program will have the following identical features:
- Interest rate of 0.5%
- Maturity of 2 years
- First payment deferred for six months
- 100% guarantee by SBA
- No collateral
- No personal guarantees
- No borrower or lender fees payable to SBA
SBA’s announcement comes on the heels of a series of steps taken by the Agency since the President’s Emergency Declaration to expeditiously provide capital to financially distressed businesses affected by the Coronavirus (COVID-19) pandemic.
Related Stories
Coronavirus | Mar 20, 2020
AIA implores Congress to provide relief to business owners and employees
The American Institute of Architects (AIA) 2020 President Jane Frederick, FAIA, and EVP/Chief Executive Officer Robert Ivy, FAIA, are urging Congress to address the critical needs of business owners and employees during the COVID-19 pandemic.
Coronavirus | Mar 20, 2020
Extending care capacity as COVID-19 grows
Coronavirus threatens to overwhelm the U.S. healthcare system. LEO A DALY’s health practice leader offers some innovative ideas for expanding access.
Coronavirus | Mar 19, 2020
Positive vibes: Let's take a look at the brighter side of these crazy times
Perhaps now is a good time to take a page from Monty Python's book and look on the bright side of life. So let's push aside the doom and gloom for a bit and bring a little positivity to these strange times we all currently find ourselves in.
Coronavirus | Mar 19, 2020
Force Majeure and COVID-19 in construction contracts - What you need to know
With the onset of the COVID-19 pandemic, we are all taking a closer look at many portions of our contracts.
Coronavirus | Mar 19, 2020
Technology crucial during COVID-19 social distancing
Technology can help bridge the gap during the Coronavirus pandemic as higher education institutes and corporations are moving to a remote work model.
Coronavirus | Mar 18, 2020
Coronavirus latest: Short-term pain but strong rebound likely, says Oxford Economics
Once the disruption and uncertainty fade, the rebound in global economic activity will be strong. It’s important for firms to position themselves for such a recovery.
Coronavirus | Mar 18, 2020
We are in the midst of a paradigm shift for higher education
The question for higher education is, what will the university of the future look like?
Coronavirus | Mar 17, 2020
AIA: Design services saw increase in February, but economic footings are rapidly shifting
"The rapid pull-back in activity throughout the economy will obviously be felt in the design and construction sector, and architecture firms will be one of the first to see how these events play out,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD.
Coronavirus | Mar 17, 2020
AGC to government officials: Shutting down construction projects is an unnecessary step
Construction firms are already taking steps to protect employees, most of whom already wear protective equipment, while halting work will undermine efforts to add hospital capacity.
Coronavirus | Mar 16, 2020
Boston mayor orders shut down of construction sites due to coronavirus
Boston Mayor Martin Walsh has ordered that all construction projects in the city be suspended in response to the spread of the coronavirus.
