The Paycheck Protection 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, rent, mortgage interest, or utilities.

Many credit unions who are existing SBA 7(a) lenders are be participating. You should consult with your credit union to find out if it is participating in the program. The Paycheck Protection Program will be available until funds run out, or through June 30, 2020 whichever is first.

Who Can Apply?

This program is for 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.

Loan Details and Forgiveness

The loan will be fully forgiven if the funds are used primarily for payroll costs, but proceeds may also be used for interest on mortgages, rent, and utilities.   At least 75% of the loan must be for payroll purposes.  Loan payments will also be deferred for six months. No collateral or personal guarantees are required. 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 compared to previous year averages.  Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. This loan has a maturity of 2 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 here to see the information that will be requested from you when you apply with a lender.  Your credit union, if participating, will have the actual application and documentation checklist.  You will be asked for all of your payroll records and tax filings for 2019.  

Other Assistance

In response to the Coronavirus (COVID-19) pandemic, small business owners 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.

For Credit Unions not currently signed up with SBA, they appear to be accelerating that process as well.  Click here learn more. 

If you are a SBA lender serviced by MBC, click here to be directed to your lender portal for the PPP program information and application process. 

If you are a credit union not currently working with MBC, and would like to discuss how we may be able to assist you, click here.