Dear Valued Clients and Friends,

With the window opening April 3, 2020 for small businesses to apply for $349 billion in Paycheck Protection Program loans, the Small Business Administration has released an interim final rule providing additional guidance and requirements for the program. The final rule includes a number of changes, including doubling of loans’ interest rate to 1% from 0.5%.

CARES Act Payment Protection Act under SBA Section 7(a) Program:

• Loans can be up to the lessor of $10 million or 2.5 times the average monthly payroll costs
• Up to a 2-year term with 1% interest rate
• Expanded definition of small business to include sole proprietorship, independent contractors, and self-employed individuals
• Funds to be used for payroll, rent, utilities, and mortgage payments
• No personal guaranty or collateral are required

Loan can be forgiven in whole or partially depending on the FTE retention by the business.