The Senate passed Phase 3 of the COVID-19 legislation, which is designed to get money in the hands of small business, American workers, and their families. While the legislation still must pass the House, and be signed by the President, we wanted to highlight one that could be valuable to your business (SBA loan provision).
SBA LOANS/COVID-19/PHASE 3 LEGISLATION
Allows SBA to provide federally-backed loans from February 15, 2020 to June 30, 2020 to eligible businesses to cover operational costs, including payroll, rent, health benefits (and insurance premiums), etc.
No collateral, personal guarantees, or subsidy recoupment fees required (interest rate set at 2/15/20 level)
Eligible Businesses = 500 or fewer employees
2 Eligibility Criteria = Good-faith certification of need for the loan + agree to not fire workers
The maximum loan amount is a multiplier (2.5x) of average monthly payroll costs up to $10M cap
Businesses can use loans for almost all operating costs (with limits on individual comp above $100K, comp for non-U.S. workers, and “double dipping” for Families First paid leave wages already receiving credit)
Debt forgiveness up to the principal loan amount for certain costs incurred during the covered period
Forgivable Amounts = Payroll costs; interest payments on loan obligations rent; and utilities
Forgiveness amounts reduced for firing employees or cutting wagesLeeway for businesses with multiple “small” locations that provide accommodation and food services
Sole proprietors, independent contractors, and self-employed individuals are eligible
Some relief from SBA affiliation rules for certain businesses
Source: The Council of Insurance Agents & Brokers
For more important links, check our COVID-19 Resource Center.