With the second round of funds allocated for SBA Paycheck Protection Program loans, more businesses will be able to get the financial relief they need to pull through this pandemic. wile the details outlined for Paycheck Protection Program (PPP) loans can be confusing at best, we here at Web Finance Direct have decided to address the key points business owners need to know before they apply for relief and recovery loans.
Who is Eligible for SBA Relief and Recovery Loans?
PPP loans are designed to cover business owners of all stripes. Small businesses with no more than 500 employees are eligible for SBA relief and recovery loans. This includes veterans’ organizations, sole proprietors, and self-employed individuals, such as contractors. Even large chains can qualify for PPP loans, provided their individual establishments employ fewer than 500 people at each location. Businesses in every sector – from mom and pop shops on Main Street to restaurants, manufacturers, medical facilities, and more – can apply for these loans to reinforce and support finances during this crisis.
How are the Funds Used?
PPP loans provide up to $10 million in relief and recovery funds for businesses. Unlike regular SBA loans, PPP funds must be used to support payroll and healthcare benefits for all employees earning less than $100,000 per year. Businesses can also use SBA relief and recovery loans to cover rent and utility payments on commercial spaces, as well as interest payments on commercial mortgages. PPP loans cannot be used for expenses like equipment, commercial real estate transactions, business acquisitions, or other costs typically outlined in other SBA loan programs.
Loan Forgiveness and PPP Loans
One of the major benefits of SBA relief and recovery loans outlined in the CARES Act is loan forgiveness. Businesses that are approved for PPP loans are eligible for loan forgiveness, provided they use the funds for the intended purposes mentioned above. From the time funds are made available, borrowers must also make a concerted effort to retain and hire employees without decreasing wages. If those requirements are not met, loan forgiveness will be reduced proportionally. SBA relief and recovery loans are designed so businesses can thrive in our current economic climate and minimize unemployment.
What Documentation is Needed to Apply?
SBA Payroll Protection Program loans – like all SBA loan programs – require specific documentation. Applicants will need to provide:
A valid driver’s license or state-issued ID
Articles of formation
Payroll documentation or pay stubs for employees
Business bank statements
IRS Forms 940 and 941
Copies of any existing SBA loans from January 31, 2020 to April 30, 2020
Get the Financing You Need
At Web Finance Direct, we offer SBA loans to businesses nationwide. As preferred lenders, we have the ability to fast-track SBA loan requests and perform all approvals and processing in-house, so you can access the financing you need, when you need it. Contact Web Finance Direct today to learn more about our SBA loan programs.