Wisconsin Businesses and SBA Forgivable Loans During the COVID-19 Pandemic
The Small Business Administration (SBA) recently released guidance on the new Paycheck Protection Program (PPP).
The purpose of the PPP is to provide small businesses (under 500 employees) with forgivable loans, beginning April 3, 2020, to help those businesses from having to lay off staff.
The PPP loans provide an eligible business with 2.5 months’ worth of payroll costs. Loan forgiveness is available if the loan proceeds are used for payroll costs, mortgage interest, rent payments, and utility payments in the 8 weeks following the date of loan origination. (Due to likely high subscription, the SBA anticipates that not more than 25% of the forgiven amount may be for non-payroll costs.)
Can a business get a PPP loan if it already laid off workers?
If a business would likely have their PPP loan fully forgiven, but have recently laid off some staff, the business has until June 30, 2020, to rehire any laid-off staff to remain eligible for full forgiveness.
All loans under this program will have the following identical features:
- Interest rate of 1.0%
- Maturity of 2 years
- First payment deferred for six months
- 100% guarantee by SBA
- No collateral
- No personal guarantees
- No borrower or lender fees payable to SBA
Wisconsin lawyers here to assist businesses with financial assistance programs
The lawyers at Murphy Desmond can help you with the SBA loan process and other financial assistance programs. Contact us at email@example.com or 608.257.7181.
Revised April 3, 2020