CARES Act Small Business Paycheck Protection Program

On April 3, 2020, small businesses may apply for low-interest (0.5%), potentially forgivable loans for payroll expenses, interest on mortgages, rent and utilities.  The program makes $349 billion available to businesses with 500 or fewer employees.

Funds may be used for payroll costs including salary, wages, commissions, or tips (not to exceed $100,000.00 per year for each employee); employee benefits including costs for vacation, parental, family, medical, or sick leave pay; severance payments; group health care payments; retirement benefits; and state and local payroll taxes.

The program permits loans equal to two months average payroll costs plus 25%, with a cap of $10 million.  All loans are subject to the same terms: .50% fixed rate interest; payment obligations deferred for the first six months; full payment due within 2 years; no prepayment penalty; no collateral or personal guaranty required.  Borrowers must certify that the current economic uncertainty makes the loan necessary to support ongoing operations; that the funds will be used to retain workers and maintain payroll or make mortgage, lease and utility payments; and that the borrower has not received another loan under this program.

Borrowers who maintain staff and payroll and who use the funds only for payroll, mortgage interest, rent and utility payments may apply for complete loan forgiveness.  Loan forgiveness will be reduced for borrowers who reduce full-time employee headcount or decrease salaries and wages.  Borrowers have until June 30, 2020 to restore full-time employment and salary for reductions made between February 15, 2020 and April 26, 2020.

Applications may be made through any existing SBA lender.

  • A sample application may be found HERE.
  • A program summary may be found HERE.
  • Information for borrowers may be found HERE.

Funds are limited and demand is expected to be high, therefore employers are encouraged to apply as soon as they are able to take advantage of this historic financial benefit.  Please call Kevin Callanan at (781) 878-1604 or Chris Callanan at (617) 330-7575 with questions or to discuss.

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