Yesterday MAIA Executive Director, Frank Silverman, spoke on the Paycheck Protection Program. He called it the one small business loan you NEED to apply for ASAP to protect your business from COVID-19. You can watch the Facebook live below to get all of his amazing insights.
In case you don’t have the time to watch the whole thing we got you covered. Starting tomorrow, April 3rd, the Federal Government is opening the Paycheck Protection Program for small businesses around the country.
What is the Paycheck Protection Program?
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. You must certify that the current economic uncertainty makes the loan necessary to support ongoing operations of your business. The program provides funding for up to eight weeks of payroll, mortgage and rent payments as well as utilities to businesses that keep workers on during the crisis.
Essentially, it’s a loan from the government helping you pay:
- Your employees
- Your rent (As long as lease was signed before Feb.15th, 2020)
- Any interest on your mortgage (As long as the mortgage is from before Feb. 15th, 2020)
- Your utilities (As long as service began before Feb.15th, 2020)
The best part is this is a forgivable loan from the government as long as you use the money on these four essential business expenses. But you need to make sure to keep careful records of all the business expenses you incur.
Here all the documents you need to get started:
Here are a couple frequently asked questions about this loan we found on the internet.
Here is how it differs from SBA Loans according to Bench.co‘s Simple Guide:
- No personal or business collateral is required. The SBA disaster loan may require collateral for loan amounts over $25,000.
- It’s ok if you also have access to credit elsewhere. To receive a SBA disaster loan you generally need to have no other source of credit.
- The funding covers a more restrictive set of purposes (details below). The SBA disaster loan can cover most operating expenses.
- Your loan can be forgiven if you follow the terms. The SBA disaster loan requires repayment.
Can I Apply for Paycheck Protection and an SBA Disaster Loan?
Yes, you can. However, you can’t apply for an SBA disaster loan for the same purpose as the Paycheck Protection Program. This is very important because this is a major factor in whether or not your loan will be forgiven. If you get both loans they need to serve different business needs.
We encourage you to apply as early as possible as there is a cap for this program and everyone is going to be racing to get their application in at the head of the queue. The latest applications can be in is June 30th.
For more resources on helping your small business survive during these difficult times please go to our Rebuilding From Coronavirus page. For more information on SBA Disaster Loans click here.
We are going to keep providing the best update information on what you can go do to mitigate financial loss during Coronavirus. We are going to get through this together.
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