Paycheck Protection Program

• Government backed loan for 2.5X your average monthly payroll (I.e. 10-weeks) up to $10MM
• Loan forgiveness available for payroll costs, mortgage interest, rent payments, and utilities
• 501c3 non-profit, veterans associations, sole proprietors, 1099, solopreneurs also qualify
• No personal guarantee or collateral needed

The Paycheck Protection Program was created by the CARES Act. The program is run by the Small Business Administration and will be available through Radius Bank. You will be able to borrow money based on “payroll costs” which is defined very broadly and likely includes things not normally thought of as payroll. The borrowed money can be spent on payroll costs, costs related to group health care benefits and insurance premiums, employee compensation, mortgage interest payments, rent, utilities, and interest on any other debt obligations that were incurred before the Covered Period. Maximum loan amounts may not exceed $10 million, will bear interest at a rate of 0.50%, will be subject to partial forgiveness as described below and will be 100% guaranteed by the SBA.

• The Business must be operational as of February 15, 2020 and have had employees it paid salaries and payroll taxes, or a paid independent contractor. Sole-proprietors, independent contractors, and other self-employed individuals are eligible for loans.
• Businesses with no more than 500 employees are eligible small businesses, or the applicable size standard for the industry as provided by SBA, if higher.
• 501(c)(3) nonprofit, a 501(c)(19) veteran’s organization, or Tribal business concern described in section 31(b)(2)(C) of the Small Business Act with not more than 500 employees are also eligible.
• Businesses with more than one physical location qualify so long as total combined employees are below 500 employees (unless the businesses operated under NAICS code beginning with 72) or otherwise meet the SBA’s size standard based on NAICS code.
• Affiliation Rules: The program waives affiliation rules for businesses in the hospitality and restaurant industries, franchises that are approved on the SBA’s Franchise Directory, and small businesses that receive financing through the Small Business Investment Company (SBIC) program. SBA current affiliation rules applies eligible nonprofits.

• Here’s what you’ll need to submit to apply:
  
  • SBA Form 2483
  • Payroll documentation:
    • 2019 company prepared financial statements or tax returns
    • IRS form 941s for every quarter in 2019
    • IRS form 940 for year end 12/31/19
  • Either your Articles of Incorporation, Articles of Organization, Partnership Agreement, or Trust Agreement
  • Corporate Bylaws/LLC Operating Agreement
  • Copy of Driver’s License for all owners owning more than 20% of the company (at least ONE is required on every entity), even if there is not a 20% owner (i.e. – not for profit)
  • Please prepare a document that answers the following questions:
    • NAICS Code for your organization
    • Date Entity established
    • Have you previously applied for an SBA loan? Yes/no
    • If yes, is loan current?
    • Is applicant a franchise? If so please name the franchise
• For a list of Frequently Asked Questions about the program, click here.
• For a list of Frequently Asked Questions about Loan Forgiveness, click here.