Mar 29, 2020
Congress has passed and the President has signed the CARES Act which includes a new SBA 7(a) loan program called the Paycheck Protection Program or PPP. Lenders are now working with SBA to understand this new program so it can be brought to market for Small Businesses adversely impacted by Covid-19.
Here's what's in it:
- Loans are 100% guaranteed by the SBA
- Can borrow 2.5x avg monthly payroll expense (up to $10mm)
- All or part of the loan can be forgiven after June 30 (discounted based on # of employees retained)
- Unforgiven amount will be put on 10 year term at 4%
- Payments automatically deferred for 6-12 months
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