April 27, 2020
UPDATE: Paycheck Protection Program (PPP) Round 2
The SBA released its second round of PPP funding as of 10:30 this morning. Heavy application volume has impacted the availability and processing capability of the SBA website. We continue to make every effort to assist our members and other small businesses as we’re able.
April 16, 2020
UPDATE: Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL)
We’ve recently learned that PPP and EDIL funding has been fully subscribed and the SBA has temporarily shut off the application process. However, we expect that there will be additional rounds of funding and will advise as soon as we learn more.
SBA Economic Injury Disaster Loan
In response to COVID-19, small business owners are eligible to apply to the Small Business Administration (SBA) for an Economic Injury Disaster Loan (EIDL) of up to $10,000. Funds are typically made available within three business days of SBA approval. (Time from application to approval appears to be taking more than a week currently due to high volume.) Business owners apply online directly with the SBA at https://covid19relief.sba.gov/#/
Paycheck Protection Program (PPP)
The PPP provides small businesses with a forgivable loan to pay up to 8 weeks of payroll costs including benefits, as well as interest on mortgages, rent, and utilities. This loan has a term of 2 years at an interest rate of 1%, and repayments will be deferred for six months. At least 75% of the loan must be used for payroll in order for the entire amount to be forgiven. No collateral or personal guarantees are required, and neither the government nor the lender will charge any fees. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels, and will be reduced if full-time headcount declines, or if salaries and wages decrease.
This program is available through existing SBA certified lenders such as Pawtucket Credit Union. However, due to high inquiry volume we are only able to assist PCU members currently in our pipeline. We hope to re-open the application process to both members and non-members again in the near future.
An easy to understand PPP fact sheet may be found on the U.S. Treasury website at https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
More information on PPP and additional SBA relief options may be found on the SBA website at https://www.sba.gov/funding-programs/loans/coronavirus-relief-options