The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) creates a $349 Billion loan lifeline to help small businesses such as your practice pay payroll and other costs over the next few months. We’ve assembled this quick guide and FAQ to help you understand the program and how your practice may benefit. Additionally, we’ve provided links to the Top 100 SBA loan providers with whom you might apply.
The following are the aspects of the Paycheck Protection Loan Program as we have interpreted in the CARES Act. These are subject to change upon guidance from the SBA and the U.S. government.
Updated 4/3/2020; Source: U.S. Small Business Administration
Businesses and non-profits must be operational as of February 15, 2020 and had employees for whom it paid salaries and payroll taxes, or a paid independent contractor.
Average eligible monthly payroll costs, excluding compensation above $100,000 in wages (based on prior 12 months) multiplied by 2.5 (represents months) – plus – the balance of any SBA Loan closed between 1/31/2020 and when this loan will be made, if applicable – OR – $10 million whichever is less.
Allowable uses of the loan include eligible payroll support (eligible employee salaries which excludes compensation above $100,000 in wages, paid sick or medical leave, insurance premiums), interest paid on a mortgage (excludes any prepayment of or payment of principal) or rent, and utility payments.
1.0% per annum
2-year full payout loan. There will be no prepayment penalty. Allows for complete deferment of SBA 7(a) Loan payments for at least six (6) months and not more than a year.
The loan will be unsecured. No collateral required.
Here is a shortlist of the items we will need to process the SBA 7(a) relief loan:
This is an estimate only and final amount is subject to details of the CARES Act and regulations.
Payroll costs include: employee salary, wages and commissions; payment of cash tips; payment of vacation; parental, family, medical or sick leave; allowance for dismissal or separation; payment required for group health benefits (including insurance premiums); payment of retirement benefits; or payment of state or local tax assessed on employee compensation; and sole proprietor income or independent contractor compensation not in excess of $100,000.
Payroll costs exclude: compensation of an individual person in excess of $100,000 (as prorated for the period); federal employment taxes imposed or withheld taxes; compensation to an employee whose principal residence is outside of the U.S.; qualified sick leave for which a credit is allowed under Section 7001 of the Families First Coronavirus Response Act; and qualified family leave wages for which a credit is allowed under Section 7001 of the Families First Coronavirus Response Act.
1) Reach out to your practice’s current bank or lender to see if they are approved PPP Lenders. They already have a relationship with your practice and may be better able to quickly assist you.
2) Explore any of the Top 100 SBA Loan Providers below. As the CARES Act was quickly passed to provide immediate relief, not all loan providers have a loan application yet. Below, we have provided links to application pages, where we know they exist, and will provide periodic updates. You can also visit each of the providers’ websites to check on their latest status.
Last Updated 04/08/2020