The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $349 billion in 100% federally guaranteed loans to small businesses including many non-profits. Known as the Paycheck Protection Program, the initiative is designed to help small businesses with operating expenses and maintain their payrolls to retain employees.
We want to be sure that all eligible businesses in the Ocala Metro are ready to apply for this new loan with their bank or credit union when applications are open on April 3.
On April 23, the Congress approved another $310 Billion for the Paycheck Protection Program. If you were not funded in Round 1, here are some suggested steps:
*Other lenders may be taking new applications, these are the ones who have indicated this to the CEP.
Paycheck Protection Program Information Sheet for Borrowers Updated! 04.03.20
Who is eligible? A small business with few than 500 employees, including 501(c)(3)s, sole proprietors, and independent contractors.
What are lenders looking for? That the business was in operations before February 15, 2020 and had employees they paid salaries and payroll taxes for. NOTE: No personal guarantees or collateral are required for the loan.
How can the funds be used? Employee wages, commissions, and cash tips, or equivalent payments. Additionally, loans may be used for group healthcare benefits, mortgage payments, rent, and utility payments. 75% of the loan funds MUST be used on payroll and payroll-related costs.
How much can be borrowed? Loans can be up to 2.5 times the borrower's average monthly payroll costs, not to exceed $10 million.
How does the loan forgiveness work? Borrowers are eligible for forgiveness equal to the total amount borrowers spent on the following items during the 8-week period beginning on the date of the origination of the loan: payroll costs, interest on mortgage(s), rent, and utility payments.75% of the funds must be used on payroll and payroll-related costs.
How could the forgiveness be reduced? You will owe money if you do not maintain your staff and payroll. Not more than 25% of the forgiven amount may be for non-payroll costs.
What is the interest rate and term if it is not forgiven? The loans carry a 2-year term at 1% interest with no payment for the first 6-months from funds disbursement though interest will accrue during this time.
Can I apply for other CARES Act benefits? No.Taking a loan under the Payroll Protection Program and/or having all or part of such a loan forgiven makes an employer ineligible for certain other relief under the CARES Act. For example, the payroll tax relief that is otherwise available under the CARES Act is not available to an employer that takes advantage of the Payroll Protection Program.
Additional Frequently Asked Questions from the Treasury.
For more information, you can review the SBA's Interim Final Rule for this program.
Here is the list of documents that it is anticipated you will need for the applications. Start gathering them now!
Completed Loan Application Updated! 04.03.20
Payroll Expense verification documents to include:
Payroll Summary Report with corresponding bank statement
Here are items that may be requested from your bank and will be required for the forgiveness portion of the loan:
Let your local bank or credit union know that you want to apply. Lenders can start taking applications for small businesses and sole proprietorships on Friday, April 3, and for independent contractors and self-employed on Friday, April 10. For a list of lenders who have notified the CEP that they are participating, please click here.
Copy of your driver's license and SSN
If you are an independent contractor or self-employed individual, you may be eligible for Paycheck Protection Program (PPP) loans/grants, SBA’s Economic Injury Disaster Loans (EIDL), and/or Unemployment Compensation for losses of income related to the coronavirus pandemic.View this Guide in English. Leer en Espanol.