Local Notice (April 3, 2020)—
From United States Congress Michigan District 7 Representative, published to Saline Journal by written request. [1,2]
Small businesses in Michigan are encouraged to fill out an application for the Paycheck Protection Program to receive emergency relief during the Coronavirus pandemic. Loans under this new program will be forgiven if they are used to cover payroll and certain other expenses. Applications will be accepted beginning Friday, April 3 through an existing SBA lender. [3-5]
Steps are already underway to get critical resources available through the CARES Act into the hands of Americans in need. [6-8]
Under the Paycheck Protection Program, many small businesses will have access to forgivable loans so they can pay their workers in these incredibly challenging times. I encourage Michigan’s small business community to take full advantage of this much-needed relief as soon as possible.
About the Paycheck Protection Program
The Paycheck Protection Program, established by the bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act, authorizes up to $349 billion in loans to help small businesses keep workers on their payroll. More details about the program from the Small Business Administration (SBA) are available below.
Eligible Businesses: Small businesses with five hundred or fewer employees — including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors — are eligible. Businesses with more than 500 employees are eligible in certain industries.
Application Timeline: Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans through existing SBA lenders. Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans through existing SBA lenders.
How to Apply: You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating.Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating.
All loans will have the same terms regardless of lender or borrower. A list of participating lenders as well as additional information and full terms can be found at the Small Business Association website.
Loan Forgiveness: Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months.
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
References
- United States House of Representatives (home page).
- “Congressman Tim Walberg, Representing the 7th District of Michigan” US House of Representatives.
- “Paycheck Protection Program” United States Small Business Administration.
- “Coronavirus Disease 2019 (COVID-19)” CDC: Centers for Disease Control and Prevention.
- “Novel Coronavirus Reports” CDC.
- “CARES Act” United States Department of the Treasury.
- “The CARES Act Has Passed: Here Are The Highlights” Leon LaBrecque (March 29, 2020) Forbes.
- “Diane Keller (2020.04.03)– on CARES Act businesses loan options” Diane Keller (April 3, 2020) Saline Journal.