Phase 3 Coronavirus Stimulus: Paycheck Protection Program Fact Sheet
(Division A, Title I of the CARES Act)
$377B for Small Businesses and Nonprofits to meet their payroll and expenses
Chairman Marco Rubio (R-FL), Ranking Member Ben Cardin (D-MD), Chairman Susan Collins (R-ME), Senator Jeanne Shaheen (D-NH), Chairwoman Nydia Velazquez (D-NY)
PHASE 3 Coronavirus stimulus includes a small-business emergency economic relief that will help small businesses and nonprofits impacted by the coronavirus pandemic make payroll and cover expenses. The Act provides immediate economic assistance to small businesses and nonprofits (under 500 employees) to cover payroll for their workers and all business related expenses. By empowering their existing local lenders, the Act also respects the integrity of small businesses and nonprofits, strengthens the existing mechanism by which they operate their businesses, injects an infusion of money to pay their workers and reduces bureaucracy. The plan would provide cash-flow assistance through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency.
- Small employers (S-corp, a C-corp, non-profit, partnership, independent contractor/self-employed business owner, LLC, etc…) with 500 employees or fewer will be eligible to apply for the loans.
- Loans would be immediately available through existing Small Business Administration-certified lenders (7a program), including banks, credit unions, CDFI and other existing lenders. SBA would be required to streamline the process to bring additional lenders into the program.
- The size of the loans would equal 250% of an employer’s average monthly payroll (up to $10 million per business) over the last year; but the loan can be used for rent, utilities, and interest on pre-existing debt obligations in addition to payroll expenses.
- Funds used to cover payroll and payments on pre-existing debt would be 100% forgiven.
- The maximum loan amount is 10M and the SBA Express loans increased from $350,000 to $1 million with an average of 36 hour turn-around. These loans provide borrowers with revolving lines of credit for working capital purposes.
The bill would provide grants to offer counseling, training, and related assistance to small businesses affected by COVID-19
- $265 million for SBA Small Business Development Centers and Women’s Business Centers and SBA resource partners.
- The non-federal match for Women’s Business Centers would be waived for a period of three months.
- $10 million for Minority Business Development Agency’s Minority Business Centers.
What Small Business Owners & Nonprofits Can Do to Prepare:
- Reach out to your bank, credit union, or lender to confirm whether they are a Small Business Administration (SBA) Certified lender and how you can access “7(a)” loans, if not, ask them if they are considering becoming an SBA certified lender.
- Collect the following documents to show average monthly expenses including:
- Proof of payroll expenses;
- Proof of business related expenses rent, and utility expenses; and other debt obligations over the previous year.
- Prepare to show that your business retained its employees and payroll level between Feb 15 and December 31, 2020 to make sure that the portion of the loan used for payroll and pre-existing debt would be forgiven. If you are unable to show that employee and payroll levels remained the same, your loan might not be forgiven.
Complete the small business readiness survey HERE
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