SBA’s Paycheck Protection Program for Small Businesses Affected by the Coronavirus Pandemic Launches
The U.S. Small Business Administration (SBA) launched the Paycheck Protection Program, a $349 billion emergency loan program created last week by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Per the SBA:
The loans are available to cover up to eight weeks of average monthly payroll (based on 2019 figures) plus 25% and payments are deferred for six months (interest does accrue). The SBA will forgive the portion of loan proceeds used for payroll costs and other designated operating expenses for up to eight weeks, provided at least 75% of loan proceeds are used for payroll costs. Eligible expenses for the eight-week forgiveness include:
- Payroll costs (excluding the prorated portion of any compensation above $100,000 per year for any person. Payroll costs include salary, commissions, tips; certain employee benefits including sick leave and health care premiums, and state and local taxes;
- Mortgage interest (not prepayment or principal payments) and rent payments on mortgages and leases in existence after February 15, 2020;
- Utilities such as electricity, gas, water, transportation, phone and internet access for services that began before February 15, 2020; and
- Additional wages paid to tipped employees.
To view the press release, click here.