On April 3, The Treasury posted the final application for the Paycheck Protection Program, and lenders started accepting applications from small businesses and sole proprietorships. Applications from independent contractors and self-employed individuals will be accepted beginning April 10.
The loans are for up to $10 million, on a first-come, first-served basis. The loan rate is fixed at 1% for a term of 24 months. Payments are deferred for the first six months, although interest will accrue. Loans are forgivable if spent on eligible expenses (payroll, mortgage interest, lease payments, utility payments and interest on prior debt) in a defined time period, however, no more than 25% of the loan forgiveness may be attributable for non-payroll expenses. Borrowers are urged to apply immediately and for the full loan amount of $10 million, as only one loan per borrower will be allowed.
Here are a few actions to take if you’re planning to apply for a PPP loan.
- Download and fill out the application.
- Gather up documents necessary to establish eligibility (i.e.: payroll processor records, payroll tax filings, Form 1099-MISC, income and expenses for sole proprietorships, or bank records sufficient to demonstrate qualifying payroll amount)
- Consider using an agent to help you in applying for your loan. Agent fees are paid out of lender fees, not from applicants. They are attorneys, accountants, consultants or others who prepare or assist with your application or represent you in conducting business with the Small Business Administration. If you will use an agent to assist you, contact them.
- Contact your commercial lender. You can start with the lender you already use. Ask them about their participation in the Paycheck Protection Program and whether you can submit your application to them. If they are not participating, you can find a non-exhaustive list of other area lenders on www.brac.org/recovery under the Business Resources section.
- Talk to your lender about loan forgiveness and ask about what you will need to submit to request loan forgiveness. You will need to submit documents verifying the number of full-time equivalent employees and pay rates, as well as payments on mortgage, lease, and utility obligations. Ask your lender for more details.
More information on the PPP may be found at brac.org/recovery. This page is being regularly updated to provide businesses with guidance and resources for recovery.
As BRAC’s senior vice president of economic competitiveness, Liz leads the organization’s public policy advocacy, strategy, research, and reform activities aimed at advancing the quality of life and economic competitiveness of the Baton Rouge Region.