The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is the largest stimulus package ever signed in U.S. history. This article breaks down everything you need to know about the Paycheck Protection Program application process.
It has now been nearly a week since the Coronavirus Aid, Relief, and Economic Security Act – or “CARES Act” — was signed, setting into motion the largest stimulus package in U.S. history.
While the bill allots historic levels of resources for businesses, everyday citizens, and those who become unemployed, experts believe that the funding will not cover all of the economic losses from the coronavirus (COVID-19) epidemic.
It is crucial that you know exactly what’s being offered, how to apply, and what sort of timeline to expect — even as some details are yet to be rolled out.
If you plan to apply for the Paycheck Protection Program, you need to get started right away
It appears that loans will be given on a first-come, first-served basis. We’re also hearing that if all qualified businesses apply for the loan, there may only be enough to cover 30% of them.
That means if you plan to take advantage of this program, you need to get all of your ducks in a row now and move fast. You’ll want to be first in line with your bank.
The $349 billion authorized for the PPP comes from the federal government but will be distributed by SBA lenders. Therefore, your application will go through your SBA lender.
Which documents should you be preparing right now for your PPP application?
In addition to your completed application, you should have the following documents and information available and ready to review with your banker:
- Articles of incorporation for each borrowing entity
- By-laws or operating agreement for each borrowing entity
- Copies of each owner’s driver’s license
- Payroll expense verification documents
- Certification that all employees live within the United States
- If any do not, provide a detailed list with corresponding salaries
- Trailing twelve-month profit and loss statement (as of the date of application) for all applicants
- Most recent mortgage or rent statement
- Most recent utility bills
(This list is courtesy of our friends over at Petra Coach.)
Getting these documents together today — and getting them to your lender — will assure that your application will be handled as quickly as possible.
What is the application timeline for the Paycheck Protection Program?
According to the U.S. Treasury, small businesses and sole proprietorships can apply starting on April 3, 2020. Independent contractors and those who are self-employed can start applying on April 10.
Both of these dates refer to applications going through current SBA lending financial institutions. Other regulated lenders will be able to make loans as well — as soon as they are approved and enrolled in the PPP.
The Paycheck Protection Program will be available through June 30, 2020.
What are the next steps for SMBs?
The PPP offers businesses a lifeline during this turbulent time. Every business affected by COVID should speak to their lender, legal counsel, and financial professionals as soon as possible.
Business leaders should begin assembling the necessary paperwork so there are no impediments once the application process opens.
You’ll want your application to be on the top of the pile.
While the PPP is the centerpiece of the stimulus bill’s relief for small businesses, there are other programs rolling out as well.
There are Economic Injury Disaster Loans (EIDL), which also offer small business grants of up to $10,000 that do not need to be repaid. Find out more and apply here.
There are also SBA debt-relief programs and bridge loans available.
Additionally, states are offering their own assistance programs. In Connecticut, for example, Governor Lamont has also created the Connecticut Recovery Bridge Loan Program, which can provide emergency cash flow to businesses and non-profits with fewer than 100 employees. For details, check out this website help center.
For businesses to survive and prosper during this unprecedented time, leaders need to avail themselves of every resource that’s out there.
Careful planning today can make sure your business is poised to move smoothly through the crisis.
This information was provided from Impact