Great news! The deadline to apply for a forgivable loan through the government’s “Paycheck Protection Program” has been extended.
The last day to apply was supposed to be June 30, but because the program still had about $130 billion available for lending, Congress voted to extend it to August 8.
The program, which offers forgivable loans to small businesses, was created to counter the economic downturn caused by the coronavirus pandemic. It’s part of the “Coronavirus Aid, Relief and Economic Security Act,” or CARES Act, which President Donald Trump signed into law on March 27.
Under the program, the interest rate for loans is only 0.5 – 1.0% on a two-year term backed by the U.S. Small Business Administration (SBA) and Department of Treasury. Small businesses are allowed to borrow up to 250% of their monthly payroll, rent and other expenses — but the total loan amount cannot exceed $10 million.
Here’s the best part: The SBA will forgive the portion of the loan used for payroll, rent, mortgage interest and utilities for a period of eight weeks if a small business keeps all its employees and maintains their payroll levels.
Basically, it’s free money. The federal government is offering to cover your business’ overhead if you agree not to layoff employees or dock their salaries during this health crisis.
Interested business owners are encouraged to apply as early as possible.
For more information: Visit the SBA website.