Starting April 3, small businesses and sole proprietors can begin applying for up to $10 million in the CARES Act’s PPP loans, Treasury said in a news release. Independent contractors and self-employed people can begin applying April 10. The Paycheck Protection loans, 100% guaranteed by the SBA and requiring no borrower or lender fees payable to the SBA, are aimed at providing relief to small businesses so they can sustain their businesses and keep their workers employed. Loans are actually retroactive from Feb. 15, 2020, enabling employers to rehire recently laid-off employees, and they are available through June 30, 2020, according to the fact sheet distributed by the SBA and Treasury. Loan amounts are determined by multiplying average monthly payroll by 2.5. The portion of the loan proceeds used to cover the first eight weeks of payroll costs, rent, utilities, and mortgage interest will be forgiven.
The Treasury Department said “a broad set of additional lenders” will be able to begin making loans as soon as they are approved and enrolled in the program.
Lenders who are new to the SBA 7(a) program or who are unable to verify that they have a Form 750 will need to complete an applications (on SBA Form 3506) in order to participate as a lender in the Paycheck Protection Program. Form 3506 is available on Abrigo's SBA resources page. See additional information on applying to become a PPP lender.
The SBA and Treasury Department also unveiled the application form for borrowers, SBA Form 2483. Estimated to take 8 minutes to complete, the two-page application requires that documentation be provided to the lender verifying the number of full-time equivalent employees on payroll, as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight-week period following the loan.
For underwriting, lenders will need to verify a borrower was in operation on Feb. 15 and verify the borrower had employees for whom they paid salaries and payroll taxes. Lenders will also need to verify the dollar amount of average monthly payroll costs and follow applicable Bank Secrecy Act requirements, according to the information released by the Treasury Department and the SBA.