Small businesses and sole proprietors can submit applications starting Friday, and independent contractors can apply starting on April 10. Employers who maintain minimum payroll levels and employees (at least 75% of their average) are eligible for loan forgiveness.
ORLANDO, Fla. – The Treasury Department released the application for the SBA 7(a) Paycheck Protection Program (PPP) loans, which can help small businesses maintain employment through loans that are forgivable overtime under the mandated circumstances.
The Treasury Department also released a summary guide of the program to help borrowers understand the program’s rules.
While the application is up, however, Treasury Department has set a schedule for businesses to submit the applications:
- Small businesses and sole proprietors can apply beginning this Friday, April 3
- Independent contractors and the self-employed can apply beginning next Friday, April 10
Applications should be sent directly to Small Business Administration (SBA) lenders, which can be found using a search tool on SBA’s website.
The Paycheck Protection Program is new. It was created by the just-passed CARES Act to provide small businesses (500 employees or fewer), sole proprietors, and the self-employed/independent contractors impacted by COVID-19 with loans of 2.5-times their average monthly payroll expenses (up to $10 million) to cover payroll, mortgage interest, rent and utilities for an 8-week period during the crisis.
Employers who maintain payroll levels of at least 75% of their average, and the same number of employees, are eligible for loan forgiveness.
The National Association of Realtors® (NAR) also offers information on its website about the loan program and how it applies to typical real estate job categories.
“There are still some questions as to whether a small business should include independent contractors in its employee numbers and payroll costs,” says NAR’s Senior Policy Representative, Commercial Issues Erin K. Stackley, Esq. “What we know for certain is that independent contractors can apply for their own 7(a) PPP loans. (NAR is) seeking clarity on that question from the Treasury and the SBA and will have the answer soon.”
The Paycheck Protection Program is a different type of loan than the SBA’s disaster loan program. The SBA lists all available types of potential loans on a single page, as well as an application for an SBA disaster loan.
More information on the various programs, including the Paycheck Protection Program, should be released shortly.
Click here to read the original press release.
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