Notice from EDC/REX New Haven: SBA Paycheck Protection Program Resumes

[Lee Cruz]

SBA Notice: Paycheck Protection Program resumes                                                                     January 11, 2021

SBA, in consultation with the U.S. Treasury Department, will open the Paycheck Protection Program loan portal on Monday, January 11, 2021 at 9 am ET. When the PPP loan portal system opens, it will initially accept First Draw PPP loan applications from participating CFIs, which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), and Microloan Intermediaries. Loan Details The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses. PPP loans have an interest rate of 1%. Loans issued prior to June 5 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 years. Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower's loan forgiveness amount to the lender. If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (either 8 weeks or 24 weeks). No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees. Second, the package renews the Economic Injury Disaster Loan (EIDL) program, allocates $20 billion in new funding for it, revises its rules, and extends its application deadline to December 31, 2021. Under this program, small businesses in low-income communities of less than 300 employees that have not already gotten an EIDL advance now may get one of up to $10,000. Finally, the package increases Small Business Administration (SBA) COVID-19 funding, by allocating $3.5 billion in continued debt relief and $2 billion in enhanced SBA lending.Read More