WASHINGTON, D.C. – The $2.2 trillion coronavirus relief package is giving help to small businesses to keep their workers on the job.
Starting Friday, businesses can apply to the $349 billion Paycheck Protection Program, but now is the time to prepare.
Small businesses with 500 or fewer employees can apply. Nonprofits and veterans organizations are also eligible. Independent contractors and people who are self-employed can apply starting April 10.
Loans can be up to two and a half times your average monthly payroll costs, but no more than $10 million.
These loans will be forgiven if businesses use the money a certain way.
“What the banks are going to start lending on Friday, there is a calculation towards payroll and some expenses that after June 30, you get a portion of that loan back,” said Tom Sullivan, VP for Small Business Policy at the U.S. Chamber of Commerce.
Besides payroll, most mortgage interest, rent and utility costs over the loan's eight-week period can lead to it being forgiven. Employee and compensation levels have to be maintained.
Sullivan says U.S. Chamber of Commerce believes these new loans will keep small businesses going.
“On the one hand, we've seen communities come together to support small business,” said Sullivan. “On the other hand, we heard horrible stories about businesses that have been in the family for generations having to close.”
You can find the Paycheck Protection Program application on the U.S. Treasury Department's website.
You'll need to provide payroll documentation to your lender. You can apply through any small business administration lender, along with many banks and credit unions.
This program is open until the end of June. The Treasury Department is encouraging people to apply quickly because there's only so much funding.