Small businesses expected to soon be able to apply for Paycheck Protection Program
Published 12:11 am Wednesday, April 8, 2020
A $349 billion Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security Act has been established to provide relief to millions of small businesses and keep their workers employed during the coronavirus pandemic.
Treasury Secretary Steven Mnuchin said in a statement the program, established by the Treasury Department and the U.S. Small Business Administration, is expected to be “up and running” by Friday.
“This legislation provides small business job retention loans to provide eight weeks of payroll and certain overhead to keep workers employed,” Mnuchin said. “Treasure and the Small Business Administration expect to have this program up and running by April 3 so that businesses can go to a participating SBA 7(a) lender, bank or credit union, apply for a loan, and be approved on the same day. The loans will be forgiven as long as the funds are used to keep employees on the payroll and for certain other expenses.”
The new loan program will be available retroactive from Feb. 15 so employers can rehire recently laid-off employees through June 30.
All businesses, including non-profits, Veterans organizations, Tribal concerns, sole proprietorships, self-employed individuals and independent contractors with 500 or fewer employees, or no greater than the number of employees set by the SBA as the size standard for certain industries will be eligible to apply. The maximum loan amount is up to $10 million.
The loan will be forgiven if proceeds are used for payroll costs and other designated business operating expenses in the eight weeks following the date of loan origination. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
All loans under this program will include an interest rate of 0.5%, maturity of two years, first payment deferred for six months, 100% guarantee by the SBA, no collateral, no personal guarantees and no borrower or lender fees payable to the SBA.
“This unprecedented public-private partnership is going to assist small businesses with accessing capital quickly,” SBA administrator Jovita Carranza said. “Our goal is to position lenders as the single point-of-contact for small businesses — the application, loan processing and disbursement of funds will all be administered at the community level. Speed is the operative word; applications for the emergency capital can begin as early as this week, with lenders using their own systems and processes to make these loans. We remain committed to supporting our nation’s more than 30 million small businesses and their employees, so that they can continue to be the fuel for our nation’s economic engine.”
The Greater Port Arthur Chamber of Commerce has listed its member institutions that will handle PPP loans:
- First Financial Bank (www.ffin.com), 8535 Central Mall Dr., contact Blaine Caillier, 409-736-5955;
- Third Coast Bank (www.tcbssb.com), 2901 Turtle Creek Dr. Suite 115, contact Trey Romero, 409-527-8231;
- BBVA Bank, 8150 Memorial Dr., contract Kaprina Frank, 409-729-0243;
- Texas First Bank Mid-County, 10607 U.S. 69, contact Wendy Ghromley, 409-729-0513;
- Community Bank of Texas, contact Paul Reade, 713-308-5760;
- Prosperity Bank, 3434 Twin City Hwy., Groves, contact Mary Kay Imhoff, 409-962-8457; and
- Wells Fargo Bank, 409-365-1100 (call for information).
Applicants will need: 2019 sales; 2019 cost of goods sold; the number of employees on the payroll as of Jan. 31, 2020; EIN of the business; date business started; basic business information (address, business phone, business email); personal information of owners (20% or more) including birthdate, social security number, city of birth, address and cell phone; business bank and the routing and account numbers for direct deposit.