SBA PPP Loan Criteria
SBA PPP Loans are forgivable:
- If the business uses 75% of the loan amount to pay payroll expenses during the 8 week period following receipt of the funds.
- If the business uses 25% for operating expenses.
- If the business can verify the use of funds.
Strategies to ensure forgiveness:
- Place funds in a separate account.
- Return funds that are not used in the allotted time period for the appropriate use.
- i.e. For a loan of $100K, $75K must be used in the 8 weeks to cover payroll. If the business only has $60K in payroll costs in those 8 weeks, they should either return the money or assume that portion of the loan, $15K will be un-forgiven. Non-forgiven loans revert to the terms of the loan at 2 years, 1% interest with 6 months deferred payments.
- Keep impeccable records of expenses. Bank records, expense reports, physical receipts.
US Banks originate the SBA PPP Loans.
Most banks will only accept loan applications from existing customers.
A few exceptions can be found here :https://thinksba.com/cv/
Read the entire Federal Reserve Press Release HERE: https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm
Other Stimulus Resources
Have you applied for the MSELF Loan?
The Main Street Lending Program will enhance support for small and mid-sized businesses that were in good financial standing before the crisis by offering 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. Principal and interest payments will be deferred for one year. Eligible banks may originate new Main Street loans or use Main Street loans to increase the size of existing loans to businesses.