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Information continues to come from the U.S. Treasury and the U.S. Small Business Administration about much-needed relief for American small businesses. For a refresher on the key loan options available for small businesses, please see LGT’s analysis of the Paycheck Protection Program (PPP) here, the Emergency Economic Injury Disaster Loan (EIDL) program here, and a comparison of the two types of loans here. Applications for EIDLs are already available online for download, and now so is the PPP Application Form! Before diving in to complete the application, however, take a few minutes to get familiar with some key provisions of the PPP application and process below, and don’t forget to download and review the full PPP Information Sheet from the U.S. Treasury.

PPP Key Provisions:

• Applicants may apply for both the PPP and EIDL loans. Narrowly interpreted, applicants should borrow under the PPP to cover payroll, mortgage or rent, and utilities for eight weeks from the loan origination date using the application above and submitted through an approved Small Business Administration (SBA) lender. Utilize funds from an EIDL for additional expenses for other periods. Consider also applying for the EIDL first as EIDLs have an accompanying grant that will advance up to $10,000 within 72 hours of the request. Those funds can tide a small business over while the applications are working through the approval process.
• Small businesses of fewer than 500 employees and sole-proprietors may begin submitting PPP loan applications through an approved SBA lender on Friday, April 3, 2020. Independent contractors and self-employed individuals may apply and receive loans beginning one week later–Friday, April 10, 2020.
• PPP loans have a $10 million cap at an interest rate of 0.50% for a term of two years. There is no penalty for early repayment.
• PPP loans may be forgiven. Amount of loan forgiveness is based on several factors including maintaining employee headcount, level of salary expense, and restoring or rehiring severed employees. Loan forgiveness is requested through your lender.

The Treasury is expecting that millions of American small businesses will be applying for PPP loans, so it is essential to gather the required information, meet with your LGT advisors and payroll processors as necessary to help determine the amount of loan available, and present a complete loan package to your lender.

Contact your LGT advisor today to see how a PPP loan can help. Visit our COVID-19 Financial Updates website frequently for the newest information.