SBA sets guidelines, application date for Paycheck Protection Program

The U.S. Small Business Administration (SBA) has announced its guidelines on how to apply for funds from the Paycheck Protection Program and set Friday, April 3, as the date that SBA approved lenders will begin processing loan applications.

While the SBA offers other methods of disaster relief, most of these typically take months to go through the approval process, require a significant amount of information and may not include a forgiveness element.

The PPP program is designed to get the funds into your hands as quickly as possible and many traditional SBA requirements are waived, including the collateral and personal guarantee requirements and the need to show that credit is unavailable elsewhere.

In addition, up to 100% of the loan may be forgiven based on SBA guidelines.

The maximum interest rate for a PPP loan is 4% and has a maximum maturity of 10 years, with no prepayment penalties.

Here is what you need to know as outlined by the SBA:

Who is eligible
The program is designed for any small business with less than 500 employees, which includes all Edible franchise locations.
The SBA has said that small businesses in the hospitality and food industry with more than one location could also be eligible at the store and location level if the store employs less than 500 workers. This means each store location could be eligible.

How to apply
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.
Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Use of funds and forgiveness
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll).

What information do I need
If you wish to begin preparing your application, you can download a sample form to see the information that will be requested from you.
We will be providing more information as it becomes available and you can receive alerts by email when it is posted. We will not share your information with anyone.

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