Paycheck Protection Program Coming Soon
At LNB, we are committed to helping our small business customers in this time of need. On March 27, 2020, Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act. The CARES Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic uncertainty. This initiative is known as the Paycheck Protection Program (PPP).
As of March 31, 2020, lenders are still awaiting guidance from the Small Business Administration (SBA) on how to administer the program. LNB has established a team dedicated to the program and is prepared to implement once the SBA guidance has been issued.
Here’s what we know today about the Paycheck Protection Program:
- The program is available to businesses with 500 or fewer employees to help with the cost of payroll, health care, rent, utilities and more.
- There are no personal guarantees, collateral, or SBA fees associated with obtaining the loan.
- Borrower must complete a good faith certification that they meet all the requirements of the program.
- There are two parts to the program: Deferral and Loan Forgiveness.
Am I Eligible?
You are eligible if you are:
- A small business with fewer than 500 employees
- Small business that otherwise meets the SBA’s size requirements
- A 501(c)(3) with fewer than 500 employees
- An individual who operates as a sole proprietor, individual contractor, or self-employed
- A Tribal business concern that meets the SBA size standard
- A 501(c)(19) Veterans Organization that meets the SBA size standard
- If you are in an accommodation and food services sector (NAICS 72), the 500-employee rule is applied per physical location
What Can I Do to Prepare?
While the SBA has not yet released all the requirements for an applicant to provide, LNB recommends having the following items ready:
- Payroll costs and number of employees for the previous 12 months
- Payroll data for the time period January 1, 2020 to February 29, 2020
- Health Care costs paid under a group health care plan
- Retirement plan funding paid for by the company
- Financial information for qualifying expenses:
- Mortgage Obligation Interest
As soon as the SBA releases the required guidance, LNB will take further actions to implement the program and begin accepting application. We will work diligently to get the funds into the hands of the businesses in need. Check back for more information when updates are released.
For more information regarding the Paycheck Protection Program or other Emergency SBA lending programs, please visit the SBA website at sba.gov.