Coast Commercial Credit has spread the news about the Paycheck Protection Program (PPP) under the CARES Act. The 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 employees are kept on the payroll for eight weeks and the money is used for payroll (75 percent of the funds received), rent, mortgage interest, or utilities. The program will be available through June 30, 2020.
According to Coast, the PPP is available to any small business with less than 500 employees (including sole proprietorships, independent contractors, and self-employed persons), private non-profit organization, or 501(c)(19) veterans organizations affected by coronavirus/COVID-19. Borrowers 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.
Loan payments will be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees. This loan has a maturity of two years and an interest rate of 0.5 percent.