McHenry, IL. — Small businesses looking to keep workers on the payroll have a new option in the Paycheck Protection Program. Starting today, small businesses may apply for loans through the U.S. Small Business Administration (SBA) that will be forgiven loans for businesses that keep all employees on the payroll for eight weeks. Money must be used for payroll, rent, mortgage interest, or utilities. Here are the details:
Who Can Apply
- Small businesses with fewer than 500 employees (including sole proprietorships, independent contractors, and self-employed persons)
- 501 (c)(3) Private Non-Profit Organizations
- 501(c)(19) Veterans Organizations
- Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standardsfor those industries.
- Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ fewer than 500 workers.
Where to Apply
- Businesses can apply through any existing SBA 7(a) lender or through any federally-insured depository institution, federally-insured credit union, or 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 SBA program. You should consult with your local lender as to whether it is participating in the program.
- Lenders may begin processing loan applications as soon as April 3, 2020.
- The Paycheck Protection Program will be available through June 30, 2020.
Loan Details and Forgiveness
- Loans will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent and utilities.
- It is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
- Loan payments will be deferred for six months.
- No collateral or personal guarantees are required, and neither the government nor lenders will charge small businesses any fees.
- 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.
- This loan has a maturity of two years and an interest rate of 1%.
If you wish to begin preparing your application, you can download a copy of the PPP borrower application form to see the information that will be requested from you when you apply with a lender.
Other Federal Assistance
In response to the Coronavirus (COVID-19) pandemic, small-business owners in all U.S. states, Washington D.C., and territories are currently eligible to apply for disaster assistance.
Enhanced Debt Relief is also available in SBA’s other business loan programs to help small businesses overcome the challenges created by this health crisis.
For information on additional lending options, please click here.
SBA provides local assistance via 68 district offices and a nationwide network of resource partners. To find resources near you, please click here.
Other State Assistance
Small-Business Emergency Loan Fund
A new fund has been established to provide loans to Illinois businesses experiencing hardships during the COVID-19 pandemic. Businesses located outside of the City of Chicago with fewer than 50 workers and less than $3 million in revenue in 2019 will be eligible to apply. Applications are now available.
Learn more at this link: https://www2.illinois.gov/dceo/SmallBizAssistance/Pages/IllinoisSmallBusinessEmergencyLoanFund.aspx
Downstate Small Business Stabilization Fund
As the COVID-19 pandemic continues to impact small businesses in downstate Illinois, action has been taken to make $20 million available to provide working capital available to these businesses. Funds are now available for up to 60 days of verifiable working capital up to a grant ceiling of $25,000 for businesses that employ 50 people or fewer. These funds may be used to assist private for-profit small retail and service businesses, or businesses considered non-essential by the Governor’s Executive Order without the ability for employees to work remotely.
State Treasurer Bridge Loans
Illinois small businesses can tap into $250 million in low-interest bridge loans as soon as this week to help push through the COVID-19 pandemic. The state Treasurer’s Office will make $250 million available to Illinois banks and credit unions that wish to participate. The financial institutions will determine who is eligible for the loans.
More information is available at this link: https://illinoistreasurergovprod.blob.core.usgovcloudapi.net/twocms/media/doc/march2020_smallbizreliefprogram.pdf