Coronavirus Resources for Small Businesses
This $2 trillion emergency economic relief package is the biggest rescue package in US history. While there are many provisions of the new law, we are going to summarize the ones that will most affect small businesses.
Qualifying small businesses are eligible for federal-guaranteed emergency “Paycheck Protection Program” (“PPP”) loans that have an interest rate capped at 4% for business interruption because of the coronavirus.
Who is eligible?
What is the maximum loan amount?
A business’ total average monthly payroll for the previous year, excluding compensation above $100K/employee, times 2.5.
What can the money be used for?
Payroll costs, employee benefits, including commissions or similar compensation; operating costs (e.g., rent; mortgage interest payments; utilities; interest on debts incurred before covered period)
Does the loan have to be paid back?
If a business can demonstrate that the loan was used for eligible purposes, including payroll/benefits (excluding employee comp above $100K); mortgage interest; rent; and utilities, all or part of the loan will be forgiven.
In addition to the steps above, the Federal Reserve expects to announce soon the establishment of a Main Street Business Lending Program to support lending to eligible small businesses.
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