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US Chamber of Commerce Coronavirus Small Business Guide:
Paycheck Protection Details:
Paycheck Protection / Small Business Relief
- $349 billion in SBA 7(a) loans to small businesses to cover payroll from 2/15/2020-6/30/2020.
- Covers payroll for individual employees up to $100,000 in annual compensation, expands the definition of eligible employees.
- Small business is defined at 500 or fewer employees or (if applicable) a number chosen by the Small Business Administration.
- Restaurants and Lodging (North American Industry Classification (NAIC) Code 72) that does not employ more than 500 employees per physical location eligible for a loan. The waiver of affiliate rules includes “any business concern operating as a franchise that is assigned a franchise identified code by” the SBA. SBA affiliate code list.
- Allowable use of funds: Group health care benefits, payroll, interest payments on mortgage interest obligations, rent, utilities, and interest on any other debt obligations.
- Loans calculated on average monthly payroll x 2.5 up to a maximum of $10 million. The maximum interest rate of 4%, minimum deferred repayment of 6 months, but can be up to 1-year.
- Banks aren’t penalized for these programs
- Borrowers pay no fees; SBA pays the fees.
- Loan forgiveness: Borrowers will have any payroll costs, mortgage payments, rent payments, and utility payments reduced from the principal amount of loan. Loan forgiveness is a calculation of % of employees retained during the covered period – 2/15/20 – 6/30/20.
- Utility defined as Electricity, gas, water, transportation, telephone, or internet access for which service began before 2/15/2020.
COVID-19 Client Resource Center:
Paycheck Protection Program Q&A
How the Paycheck Protection Program Works