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Paycheck Protection Program Overview

Guarantees

  • Increases the government guarantee of 7(a) loans to100 percent through December 31, 2020

Eligible Lenders

  • SBA and the Department of the Treasury are granted authority to determine additional lenders to administer the Payment Protection Program loans.

Maturity Schedule

  • 2-year maturity after application for loan forgiveness

Interest Rate

  • Fixed at 1%

Payment Deferral

  • Not less than 6 months and not more than 1 year (including payment of principal, interest, and fees)

Terms of Loan Forgiveness
(Sec. 1106)

  • Loan recipients will be eligible for loan forgiveness for an 8-week period after the loan’s origination date in the amount equal to the sum of the following costs incurred during that period:
    • Payroll costs (compensation above $100,000 excluded)
    • Payment of interest on mortgage obligation Rent obligations Utility payments
  • The amount forgiven cannot exceed the amount borrowed.
  • Loan forgiveness will be proportionally reduced if the average number of employees is reduced during the covered period as compared to the same period in 2019. The amount of loan forgiveness will be reduced by the amount of any reduction in total employee salary or wages during the covered period that is in excess of 25 percent of the total salary or wages.
    • Payroll documentation and documentation of expenses are required to receive forgiveness, to ensure the forgiveness was used to retain employees and pay expenses.
    • Borrowers that rehire laid off workers by June 30 won’t be penalized for having a smaller workforce at the beginning of the period.
    • Borrowers with tipped workers may receive loan forgiveness for the additional wages paid to those employees.
  • Lenders have 60 days to issue a decision on the application
  • The canceled loan amount will not count towards gross income for tax purposes

Waivers

  • Borrower and lender fees are waived
  • Prepayment fees are waived

Nonbinding Guidance

  • Lenders should prioritize small businesses, entities in underserved and rural markets, veterans and members of the military community, small business concerns owned by socially and economically disadvantaged individuals, women, and businesses in operation for less than 2 years

Appropriated Amounts for Program

  • 659 billion

 

Please contact our SBA Lending Team via telephone at 443-923-0573, or by email at SBA@theharborbank.com to learn more.