Payroll Protection Act Loans (How to Apply For Them)
The question of the day is whether to go about SBA loan applications and how.
There are lots caveats, but here are the broad strokes.
Legislation passed congress and was signed by Trump Friday
It provides for loans of 2.5x last year's average monthly payroll (up to $10 million)
It can be used for payroll and other essential overhead items like employee benefits and debt interest
If you keep employment at pre-coronavirus levels for eight weeks after receiving the loan it is eligible to be forgiven
The loans will NOT be processed through the SBA's web site.
Banks will take applications, process the paperwork and provide the loans through the existing SBA 7(a) framework
Lending guidelines have been relaxed and they "hope" funds will be available in three weeks
Several bankers we have talked with today have confirmed there is no way for them to process these applications today. The legislation provides 15 days for SBA and lenders to figure out how to administer the loans. Most hope to be taking applications next week.
If you have not done so already and you anticipate applying for a loan contact your banker tomorrow and get specifics on when they expect to begin processing applications and what information they will require.
Then get that information to us and we will help. In normal times we would be making some of these calls for you. But there is no way for us to run point on this with each client's local bank. Please take initiative and get on the list with your banker.
Whether to accept the money is a question we will focus on helping clients answer over the next week. For now let's assume you will need it and start the process.