The federal government wants to help companies keep their workers on the payroll, as reported by the SEMA Washington, D.C. staff. Under a recently enacted federal law, small businesses may file a “Paycheck Protection Loan” application with local participating banks. These are forgivable loans.The interest rate is 1.0% on a two-year loan backed by the US Small Business Administration (SBA) and the US Department of the Treasury.
Companies may borrow 250% of their business’ monthly payroll up to $10 million to cover payroll, rent, and other expenses. In turn, the SBA will forgive that portion of the loan used for payroll, rent, mortgage interest, and utilities for a period of eight weeks if a small business retains its employees and payroll levels.
Since there is a program funding cap, businesses in need are encouraged to contact banks, get the necessary paperwork in order, and file an application as soon as possible.
Visit the SBA website here for more information.