The Coronavirus Aid, Relief and Economic Security Act, or CARES Act includes $350 billion set aside as part of a new federal small business loan program. The Paycheck Protection Program (PPP) loan is a provision included in the recently passed CARES Act. The Small Business Administration (SBA) has the ability to guarantee $350 billion in loans to small businesses using a network of banks. The PPP loan provides eight weeks of cash-flow assistance to small businesses with 500 employees or fewer.
The low-interest loans are meant to cover payroll costs, paid sick leave, supply-chain disruptions, employee salaries, health-insurance premiums, and mortgage payments. The maximum loan amount is $10 million while the interest rate on the loans can’t surpass 4%. On March 31st, the Department of the Treasury posted information for borrowers, as well as the application that borrowers can view and start completing.
Small Business Paycheck Protection Program Resources
Starting April 3, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders. Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders. Other regulated lenders (banks, credit unions) will be available to make these loans as soon as they are approved and enrolled in the program.
The American Dental Association and the Academy of Dental CPAs developed a fact sheet explaining the available loan options. The AAO urges interested members to apply for loans as soon as possible.
Canadian Members looking for small business resources can learn more about
the Canadian COVID-19 response here.