Nuts And Bolts
- First Come. First Served. Loans will be available through June 30, 2020, although program funding limitations may impact loan availability for those businesses applying later in the availability timeframe.
- SBA Lenders Only. You can only make application through your bank or credit union if the bank is an authorized Small Business Administration lender – so you must have a banking relationship with the lender. You will apply for your loan through your lender’s website. It is all online.
- Amount. The amount that you apply for is 2.5 times your average monthly payroll. Use 2019 to calculate your average monthly payroll expense. Repayment terms, if not forgiven, are 2 years at 1% interest. Repayments can be deferred for up to 6 months
- Electronic signing. You will have to create an electronic signature to sign the application.
- Supporting Documentation. You will need to support your payroll estimate with 2019 payroll reporting forms, such as 2019 IRS Quarterly 940, 941, or 944 payroll tax reports.
- No Personal Guarantee. It is extremely unusual to have a SBA loan without a personal guarantee, and no collateral required. It is possible that this will be modified at a later time.
- When do I get my money? As soon as your lending institution approves the loan, the SBA registers the loan, and the business owners sign the promissory note. Then the lender and put the money in your business account.
- Loan Forgiveness? 100% of the loan may be forgiven if the business uses 100% of the loan money for payroll and other qualifying expenses, like rent, mortgage interest, employee benefit costs, etc. However, non-payroll costs are limited to a maximum of 25% of your loan amount for forgiveness purposes.
- Action Step: use at least 75% of the loan proceeds for payroll. Forgiveness is based on the employer maintaining employee headcount or quickly rehiring employees and maintaining salary levels in place on February 15th during the 8 weeks following the loan origination date. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
- Zeigler Townley PC can assist with the loan application process. Contact firstname.lastname@example.org or 248.643.9530.
Here is the SBA link for more information about the program