CARES Act Small Business Loans: The Application and Important Information
Available Tomorrow – April 3, 2020
Earlier this week, the U.S. Department of the Treasury and the Small Business Administration (SBA) released the application form for businesses to apply for and obtain loans under the Paycheck Protection Program. The targeted program, established under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), provides $349 billion for small business loans to cover qualified payroll costs, rent, utilities, and interest on mortgage and other debt obligations. To access a loan, a qualifying small business will need to submit a loan application through an approved SBA and the U.S. Department of the Treasury – authorized / approved bank, credit union, or non-bank lender.
For small businesses and sole proprietorships, the U.S. Department of the Treasury has indicated that applicants can begin obtaining loans from participating lenders as soon as tomorrow, Friday, April 3, 2020. In addition, independent contractors and self-employed individuals can begin applying next week, on Friday, April 10, 2020. A list of current SBA lenders is outlined on the SBA website (www.sba.gov). To gain access to the CARES Act Small Business Loan Program, borrowers must complete the online application and submit applicable payroll documentation.
The U.S. Department of the Treasury also provided additional guidance about the Paycheck Protection Program, which includes the following information:
- All loans will have a maturity of 2 years and an interest rate of 0.5%. Terms will be the same for all borrowers.
- The SBA expects a high subscription, 75% of the amount forgiven must be used to cover payroll costs.
- Only 25% of the forgiveness amount may be used for rent, utilities, and interest on mortgage.
- Eligible loans will be fully forgiven (including interest accruing during the forgiveness period).
* Please note: Anchor Loans is not an authorized SBA Lender, therefore we are not participating in the Paycheck Protection Program. We are sharing this resource with our customers who might be able to benefit from the CARES Act for informational purposes only.