Small business may keep employees paid, at home
Beginning Friday, small businesses affected by the COVID-19 pandemic may be able to keep employees on the payroll, even if they’re forced to stay at home.
The Paycheck Protection Program is a new forgivable loan provided through the U.S. Small Business Administration. PPP is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest or utilities. At least 75 percent of the forgiven amount must have been used for payroll.
The program is available through June 30.
Rep. Becky Currie, R-Brookhaven, said businesses shouldn’t put off applying.
“You can apply starting Friday until June, but I expect that it will be flooded and the money may run out,” Currie said. “So I wouldn’t hesitate to meet with my bank or credit union to make sure you are the first to get in.”
Any small business with less than 500 employees can apply — including sole proprietorships, independent contractors and self-employed persons – as well as any private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus COVID-19. Businesses with more than 500 employees in certain industries may qualify if they meet SBA standards for those industries.
Small businesses in the hospitality and food industry with more than one location could also be eligible at the local level, if each store employs less than 500 workers. Each store location could be eligible.
Businesses can apply through any existing SBA 7(a) lender or through any federally insured bank or credit union, or Farm Credit System institution that is participating. Businesses interested in applying should consult their local lenders to see if they are participating in the program. Lenders can begin processing applications as early as Friday.
Loan payments will be deferred for six months, no collateral or personal guarantees are required and no fees will be charged, either by the government or lenders. For more information on the program or other assistance, visit the U.S. Small Business Administration website at sba.gov.