Summary of the US Coronavirus Paycheck Protection and Economic Injury Disaster Loans

1. Paycheck Protection Program Loans (PPP)

• This loan is intended to facilitate near-term continuation of employment for businesses experiencing economic stress due to the COVID-19 crisis.

• It is meant to be used to continue or restore numbers of employees and compensation levels to those existing before February 15, 2020.

• The attractive feature of this program is that amounts paid for payroll and other certain costs during the 8 week period from the loan origination date will be forgiven.

• Eligible businesses: Small businesses under 500 employees including sole proprietors, independent contractors, partnerships and 501c(3) charities who were in business before February 15, 2020,and paying employees or independent contractors and/or self-employment earnings.

• Loan amount: 2.5 X average monthly payroll costs for the year prior to loan date.

• Payroll costs include: Employee compensation up to $100,000 per employee including commissions, tips, vacation, sick, family leave and separation pay. Employer paid group health premiums, retirement benefits and state/local payroll taxes.

• Documentation: Quarterly payroll returns, Forms 1099, Income/expense records for sole proprietors.

• Forgiveness amount: Amount used to pay payroll costs, mortgage interest, rent, and utilities for the 8 week period from loan date.

• Loan repayments: Amounts not forgiven are repaid over 2 years at .5% interest. No payments required for first 6 months.

• No guarantees or collateral required.

• How To Apply: Start with your bank. Many are SBA lenders. Visit the SBA website to locate one if not.

• When to apply: As early as possible as funding is not unlimited. Many small businesses can begin applications starting April 2, 2020 and lenders can begin processing them on April 3, 2020. Self -employed applications begin processing on April 10, 2020.

2. Economic Injury Disaster Loans & Grants (EIDL)

• This loan program includes two features. All applicants will receive a $10,000 grant within 72 hours of applying.

• There is no obligation to repay even if the loan is ultimately denied.

• Loan amounts up to $2,000,000 are available and will be determined by the lender based upon economic injury/need of the applicant.

• This loan is available for all general working capital needs.

• Guarantees and collateral may be required depending on amount of loan.

• Eligible businesses are generally the same as for PPP loans above but also include all types of non-profit organizations besides 501c(3) charities.

• Loan terms: Repayment periods up to 30 years. Business interest rate is 3.75% and Non-profit rate is 2.75%.

• Online applications are at: https://disasterloan.sba. gov/ela/

• We understand the applications will be directed to your bank noted in the application or another local SBA lender if needed.

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