The SBA guarantee will be 100% through the end of 2020. Payments will be deferred for the first 6 months. Loans will be administered through local and regional banks; any federally regulated bank may become an SBA lender for this purpose.
The interest rate is fixed at 1.0%. Loans made after June 5, 2020, will have a 5-year term and loans made before then were 2-year terms but may be modified if borrower and lender mutually agree to do so.
Eligibility: Small businesses (as defined by SBA size standards, generally >500 employees, but may be >1,500 employees depending on sector), sole proprietors, the self-employed, and independent contractors.
- SBA’s standard “no credit elsewhere” test is waived. No personal guarantee or collateral required and no additional fees will be applied.
- Loans up to $10 million. Amount is based on recent payroll costs (compensation paid to individuals, including self-employed). Compensation in excess of $100,000 a year to any individual is excluded.
- Business must certify the loan will be used to retain workers, maintain payroll, make mortgage / lease payments, and pay utilities. 60% must be designated for payroll expenses, non-payroll costs cannot make up more than 40%.
- Loans may be forgiven, up to an amount equaling eligible payroll, mortgage interest, rent and utility cost, incurred during a 24-week period starting from the date the borrower receives the funds. Compensation in excess of $100,000 a year to any individual, independent contractor or sole proprietor will not qualify.
- Non-payroll costs cannot make up more than 40% of the loan forgiveness amount.
- Loan forgiveness is reduced by layoffs or pay reductions in excess of 25%.
- Loan forgiveness is not treated as taxable income.