Barring any changes resulting from a new COVID-19 relief bill (still being negotiated in Congress), the last day to get a Paycheck Protection Program loan approved is Saturday, August 8.
The PPP is a loan that can be forgiven either in full or in part if certain requirements are met. The loan can be forgiven in full if a business spends PPP funds on eligible expenses and meets employee retention requirements, like maintaining salary and hours and rehiring workers. Additionally, to receive full forgiveness, at least 60 percent of the forgiven amount must be used for payroll expenses.
For a detailed overview of PPP forgiveness, read ABA’s FAQ on PPP forgiveness.
In general, the PPP loan details are as follows:
- 1 percent interest rate;
- Two-year maturity for loans prior to June 5 (talk to your lender about changing to five-year maturity) and five-year maturity for loans issued after June 5;
- Six months of loan payment deferment;
- No collateral or personal guarantees required; and
- No additional government or lender fees.
In June 2020, the Small Business Administration announced an online tool dedicated to matching small businesses with Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), Farm Credit System lenders, microlenders, and traditional smaller asset size lenders participating in the PPP.
According to the SBA’s news release, within two business days of entering your information into Lender Match, you will receive an email from lenders you have been matched with. (Note: This does not mean you have been approved for a loan; this is the beginning of the process.) You will see a request to begin an application.
If you have not yet applied for a PPP loan and are still interested, contact your local lender, use the SBA’s Lender Match tool, or search for an eligible lender here. (Note: Some lenders may have stopped taking new applications.)