OVERVIEW OF US $2T CORONAVIRUS STIMULUS PACKAGE
The new stimulus package is the largest economic recovery package in United States history. Under this package, the Small Business Administration will administer a program to distribute $350 billion to small businesses in forgivable loans. This means that small business will not have to resort to laying off their employees.
What is included in the forgivable loan program?
- Loans of up to $10 million for businesses with 500 or less employees.
- Loans’ interest rates capped at 4%.
- Deferred interest payments for six months to a year.
- No personal guarantees or the use of assets as collateral required.
- Funds spent on eight weeks’ worth of payroll expenses will not need to be repaid.
Who can apply for the loan?
- Businesses and nonprofit organizations with less than 500 employees, with certain exceptions; and – were operational as of February 15, 2020 or earlier – can show proof of payment for employee salaries, payroll taxes, or independent contractor fees.
- Self-employedand gig workers, including ride-sharing company drivers.
How to apply?
- Through banks, credit unions, and private lendersapproved to issue 7(a) small business loans.
- The Treasury Department plans to roll out new regulations that will make it possible for almost all FDIC-insured banks to release SBA loans.
How much money can be taken out for a loan?
- A maximum of$10 million
- Lenders are instructed to use a formula that takes into account how much the business previously spent on payroll expensesto determine the appropriate loan amount.
What if the borrower is unable to repay the loan?
The bill includes loan forgiveness for businesses that retain employees or rehire those that had been laid off during the outbreak. Loan forgiveness can be applied to portions of the loan spent on payroll, rent payment, utilities, and mortgage expenses incurred within an 8-week period since the start of the loan’s origination date.
Need more help?
Small businesses may apply for a separate SBA program for disaster loans with a maximum amount of $2 million directly issued from the agency. You can find more information about this forgivable loan program at SBA.gov.
The information above has been gathered from resources available to us at the time. Please check on the facts on your own before making any decisions based on this information.
Article derived from UPrinting.com