U.S. Treasury Releases Additional Guidance On Paycheck Protection Program
On March 31, 2020, the U.S. Treasury released additional guidance regarding the Paycheck Protection Program established under the CARES Act, which provides for forgivable loans to eligible borrowers based on payroll costs. For our earlier article summarizing the Paycheck Protection Program, please click here.
Key points from the guidance include:
- Small businesses and sole proprietorships can apply for loans under the program beginning April 3, 2020; independent contractors and self-employed individuals can apply beginning April 10, 2020
- Applications can be made through any existing SBA lender or other participating financing institution
- Applicants must provide payroll documentation as part of the application
- All loans under the program will be on the same terms
- Loan payments will be deferred 6 months
- Not more than 25% of the forgiven amount may be for non-payroll costs
- If the entire amount is not forgiven, the balance will accrue interest at a 0.50% fixed rate and be due in 2 years
The full text of the guidance from the U.S. Treasury, including a sample application form, is available here.