CARES Act & Payroll Protection Program (PPP) Roll Out
As we reported yesterday (4/2/20), our Chamber Members in the banking industry warned us to expect hiccups in the roll-out of the PPP loans today. The final rules from the CARES Act were not released to financial institutions until very late last night (April 2nd). The interest rate is set at 1% with a 2-year loan period. Click here to review the “interim” final rules from SBA. While the PPP is scheduled to launch today as planned, many banks are not prepared to process these loans due to the lateness of the final rules being provided to them. Best advice we are hearing… PATIENCE on all fronts.
Click here for a link to the PPP application. As we noted yesterday, the actual application may vary a bit among lenders but reviewing this application will help you to prepare the required documents.
Finding a PPP Lender
We are also told that more financial institutions other than SBA (c)7 lenders (such as credit unions, etc.) will be offering PPP loans as early as this weekend. We were delighted to get this link below this afternoon from Donald Pellico at the Illinois SBA office: https://www.sba.gov/paycheckprotection/find.
This site allows businesses to enter their zip code and it will identify their closest SBA approved lender institution to apply for PPP loans and will be updated as new lenders come online. As a reminder, your best bet is to contact your current lender since they will know you and your finances to expedite the process. We understand that many financial institutions are giving their current customers priority for that reason. However, should your lender not be available, this website will be a great resource.
How Long with PPP Funds Be Available?
We know many of our members are concerned that the $349 billion in PPP loans will run out prior to getting their loan application getting through to systems. The U.S. Chamber official stated in the briefing this morning that an estimated over $889 million have been applied for as of earlier today. However, in speaking with elected officials, he is confident that more funds will be added to this program if needed since they understand these funds are a lifeline to small businesses.
An interesting link provided by the U.S. Chamber of Commerce highlights the dollars available through the CARES Act by state. Click here to see funds available to small businesses in Illinois.
Direct Assistance to 1099 Employees/ Contract Employees in the PPP
The CARES Act specifies that 1099 employees/independent contractors are eligible for PPP funds. However, their application period will not open until next Friday, April 10th. We are waiting to receive more information about the PPP application for these employees since their financial recording is different than for small businesses. We hope to have this information for you early next week.
Stay tuned for daily updates and do not hesitate to reach out for additional details or resources about the information provided in today’s brief.
Reba Osborne, Director of Government Affairs