COVID-19 Relief for Small Businesses is Here

The Small Business Administration (SBA) now offers loan programs under the recently passed CARES Act for small businesses.  These programs can provide immediate funding to small businesses to help cover payroll, benefits and key business expenses.  On April 3, 2020, the SBA began accepting applications from small businesses (Corporations and LLCs) and sole proprietorships. On April 10, 2020, the SBA will accept applications from independent contractors and self-employed individuals may apply.

SBA certified lenders are now accepting applications for the Payroll Protection Program (PPP). The PPP provides forgivable loans to small businesses so long as 75% of the loans are used to fund payroll for existing employees. The remaining 25% may be forgiven if used for rent, mortgage interest and utilities. The small business must also retain the employee and no reduce compensation to the employee. The payroll costs, interest on mortgages, rent and utilities must have been effective or established prior to February 15, 2020. You may use the loan proceeds to pay for employee benefits such as vacation, medical, parental, family,, or sick leave; group health care benefits including insurance premiums; retirement benefits; and State and local taxes assessed on compensation.

if the loan is not forgivable, the loans is made on a two (2) year repayment term and at an interest rate of one-half of a percent (0.5%). Payments are deferred from the first six (6) months, however, interest will continue to accrue. There are no application fees or pre-payment penalties.

In order to apply for the PPP loan, you must contact your Bank where you maintain your primary accounts. Your Bank should be SBA certified. Most lenders, as of the date of this Blog, have a dedicated web-page for COVID-19 relief. You will need to complete the PPP loan application and submit it with the required documentation to the Bank by June 30, 2020.

Northshore Legal LLC specializes in real estate law, and represents buyer and sellers of residential and commercial real estate. We will continue to provide updates throughout the pandemic crisis. We can be reached at consultation@northshore.legal or 781-463-6063.