The law provides clear guidelines on what small businesses are eligible, and what their loans will look like. Here are the details.
ELIGIBILITY - Any business with less than 500 employees is eligible for the loan. All states and territories are eligible. Self-employed individuals, independent contractors, and sole proprietors are also eligible.
PRIORITY - Priority will be given to businesses in under-served and rural markets, including veterans and members of the military community, women, socially and economically disadvantaged individuals, and businesses that are less than two years old, reads the text of the bill.
WHAT IT COVERS - Operating costs, including employee payroll (and other forms of compensation), employee health care, mortgage, rent, utilities, and debt payments are included. The quarterly payroll cost for an employee cannot be more than $33,333 (i.e., the equivalent of an annual salary of $100,000).
REPAYMENT - The loans are federally-guaranteed (meaning there is no interest on the loan), and tax-free. All loan payments are deferred for one year. The loan is forgivable, meaning it doesn’t have to be paid back, during what is called a “covered period and the costs meets the criteria.” This period is eight weeks, chosen by the small business owner and the lending agency, between February 15, 2020 and June 30, 2020.
If the crisis continues longer than expected, the law can be amended and the time period extended, according to a spokesperson for Senator Marco Rubio. The eight-week period was determined in discussions with business industry leaders.
For more info on Paycheck Protection Program, click here.
For SBIA info on Small Businesses being affected by COVID- 19, click here.
For grant and loan resources, click here.
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