Sentinel is advising clients and partners who plan to apply for a Paycheck Protection Program (PPP) loan to do so as early as midnight tonight. Demand for the $349 billion federal aid program is expected to be very high when banks open on Friday, April 3; opening day for loan applications at participating North Carolina banks.
Here’s what you should do, today, to maximize your chance of securing a Paycheck Protection Program loan for your small business.
- Make sure you qualify. Most for-profit businesses and nonprofit organizations with fewer than 500 employees will qualify, but there are some exceptions. The U.S Department of Commerce has prepared a handy loan eligibility guide and checklist, here.
- Find a lender. Sentinel recommends applying through your current financial institution, provided they are an approved Small Business Administration lender and are participating in the Paycheck Protection Program. For a list of SBA-approved lenders, click here.
- Understand PPP loan terms and conditions. This program is meant to save American jobs and keep U.S. businesses open throughout the coronavirus pandemic. Funds are to be used for payroll, rent, mortgage interest, or utilities. There are no fees to apply, and best of all–loans will be forgiven if you can show that you kept employees on the payroll eight weeks from loan origination. You can borrow up to $10 million, or 2.5 times your average monthly payroll cost; whichever is lower. For repayment, the interest rate is .5 percent, due 24 months from origination, with a six-month deferred payment schedule.
- Fill out the application. Download the loan application here.
- Assemble needed documentation. You will be asked to verify (1) the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, (2) covered mortgage interest payments, (3) covered rent payments, and (4) covered utilities for the eight weeks after loan origination.
- Submit the application through your lender. Businesses and nonprofits may apply as early as midnight, April 3. Independent contractors may apply as early as midnight, April 10. The PPP loan program will be available through June 30.