Paycheck Protection Program Application Released
By: Timothy Lynn
The Treasury Department has released the application for 7(a) loans under the Payroll Protection Program. The application is available at:
Based upon further information provided by the Treasury Department, note the following:
• Due to the expectation that a high number of companies will participate in the program, forgiveness is likely to be capped at 25% for non-payroll costs (e.g., rent, utilities, mortgage interest)
• Deferral of payments of interest and principal will be for only 6 months
• Applications can be submitted beginning Friday April 3rd.
• The date for applying as an independent contractor or self-employed individual is delayed to Friday April 10th.
• Applications can be made through any SBA lender or federally insured depository institution. We advise caution in proceeding with any lender that is not a preferred or express SBA lender.
• Payroll documentation is required to be provided to the lender.
Confirmation has been provided regarding layoffs and compensation cuts made through April 26th – provided the jobs or compensation is restored by June 30th, loan forgiveness is unaffected. Note that this exception does not apply to layoffs after April 26th.
Perhaps most significant: Interest rate is a fixed 0.50% rate.