PAYCHECK PROTECTION PROGRAM LOAN (PPP)

Interest: 1%

Repayment Period: 2 Years for Loans approved before 06/05/2020

Repayment Period: 5 Years for Loans approved after 06/05/2020

No payment/Forgiveness: Until forgiveness application is processed or 10 months after covered period ends.

USE OF FUNDS

  • At least 60% of Loan must be used for Payroll (Non-payroll Up to 40%)
  • Payments to Independent Contractors
  • Mortgage Interest Only
  • Rent/Lease Expenses
  • Utilities (Includes Transportation)

COLLATERAL: None

FORGIVEN AMOUNT INCLUDES: (Becomes tax exempt grant) Use Form 3508 or 3508EZ

  • Expenses for the 24 weeks starting from loan funding date
  • Payroll including bonuses, except pre-paid payroll beyond the 24 weeks
  • Owner’s payroll is limited to 20.83% of 2019 compensation or $20,833
  • Employee’s payroll is limited to 46.15% of 2019 compensation or $46,154


ECONOMIC INJURY DISASTER LOAN (EIDL)

Interest: 3.75%

Period: 30 Years

No Payment/No interest Period: 1 year

USE OF FUNDS

  • Working Capital
  • Purchase only American made Equipment (if possible)

DO NOT USE FOR

  1. Payment of any dividends or bonuses
  2. Disbursements to owners, partners, officers, directors, or stockholders, except when directly related to performance of services for the benefit of the applicant;
  3. Repayment of stockholder/principal loans, except when the funds were injected on an interim basis as a result of the disaster and non-repayment would cause undue hardship to the stockholder/principal;
  4. Expansion of facilities or acquisition of fixed assets;
  5. Repair or replacement of physical damages;
  6. Refinancing long term debt;
  7. Paying down (including regular installment payments) or paying off loans provided, or owned by another Federal agency (including SBA) or a Small Business Investment Company licensed under the Small Business Investment Act. Federal Deposit Insurance Corporation (FDIC) is not considered a Federal agency for this purpose;
  8. Payment of any part of a direct Federal debt, (including SBA loans) except IRS obligations. (Additional requirements regarding the payment of federal debt start on page 75 of the SOP.)
  9. Pay any penalty resulting from noncompliance with a law, regulation or order of a Federal, state, regional, or local agency.
  10. Contractor malfeasance; and
  11. Relocation or Expansion

COLLATERAL

  • Property Owned
  • Property Acquired with funds
  • Inventory
  • Accounts Receivable
  • Legal instruments including Promissory Notes
  • Deposit Accounts

CONDITIONS

  • Borrower will not voluntarily relocate without prior written permission from SBA
  • Will keep receipts, invoices, contracts, cancelled checks for at least 3 years
  • Provide Proof of Insurance within 12 months
  • Keep proper books for the most recent 5 years
  • Record of dividends or distributions to owners with 10% or more of ownership
  • Misuse of loan will be liable for 150% of loan amount.

 

No comment yet, add your voice below!


Add a Comment