Following President Trump’s signing of the landmark Coronavirus Aid, Relief and Economic Security (CARES) Act, SBA Administrator Jovita Carranza and Treasury Secretary Steven T. Mnuchin have announced that the SBA and the Treasury Department have launched a strong effort to mobilize banks and other lending institutions to provide small businesses with the capital they need.
The CARES Act establishes a new $ 349 billion paycheck protection program. The program will bring much needed relief to millions of small businesses so that they can support their operations and keep their employees working.
âThis unprecedented public-private partnership will help small businesses access capital quickly. Our goal is to position lenders as the single point of contact for small businesses – the application, loan processing and disbursement of funds will all be administered at the community level, âCarranza said.
âSpeed ââis the key word; emergency capital requests can begin as early as this week, with lenders using their own systems and processes to make these loans. We remain committed to supporting our country’s more than 30 million small businesses and their employees, so that they can continue to fuel our country’s economic engine, âshe added.
âThis legislation provides for small business retention loans to provide eight weeks of payroll and some overhead to keep workers employed,â Mnuchin said. âThe Treasury and Small Business Administration expect this program to be up and running by April 3 so businesses can approach a participating SBA 7 (a) lender, bank or credit union,â apply for a loan and be approved the same. daytime. The loans will be canceled as long as the funds are used to keep the employees on the payroll and for certain other expenses. “
The new loan program will help small businesses pay their payroll and other operating expenses. It will provide critical capital to businesses with no collateral requirements, personal guarantees, or SBA fees, all with a 100% SBA guarantee. All loan payments will be deferred for six months. More importantly, the SBA will forgive the portion of the loan proceeds that is used to cover the first eight weeks of salary costs, rent, utilities, and mortgage interest.
The Paycheque Protection Program is specially designed to help small businesses retain their workforce. Visit SBA.gov/Coronavirus for more information on the Paycheck Protection Program.
The new loan program will be available retroactively from February 15, 2020, so employers can rehire their recently laid-off employees until June 30, 2020.