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Small business owners
are encouraged to act NOW to prepare to apply for federal relief related to the
Coronavirus (COVID-19) pandemic. While waiting for federal relief, Governor
Ivey encourages small business owners to contact their local banker,
accountant, financial advisor, or credit union for information about who is
eligible, what documents are needed, and how best to apply for finding relief
caused by COVID-19.
The Paycheck Protection
Program (PPP) authorizes up to $349 billion in forgivable loans to small
businesses to pay their employees during the COVID-19 crisis. All loan terms
will be the same for everyone.
The loan amounts will
be forgiven if:
·
The
loan proceeds are used to cover payroll costs, and most mortgage interest,
rent, and utility costs over the eight-week period after the loan is made; and
·
Employee
and compensation levels are maintained.
Payroll costs are
capped at $100,000 on an annualized basis for each employee. Due to likely high
subscription, it is anticipated that not more than 25% of the forgiven amount
may be for non-payroll costs. Loan payments will be deferred for six months. Although
the PPP will not be open until June 30th, businesses are encouraged to apply
quickly because there is a funding cap and lenders will need time to process
loans.
Application Dates:
April 3,
2020 Small businesses and
sole proprietorships can apply for and receive loans to cover their payroll and
other certain expenses through existing SBA lenders.
April
10, 2020 Independent
contractors and self-employed individuals can apply for and receive loans to
cover their payroll and other certain expenses through existing SBA lenders.
Other regulated lenders
will be available to make these loans as soon as they are approved and enrolled
in the program.
For more information,
please visit the U.S. Small Business Administration’s website at https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp.
To view Governor Ivey’s
letter to small business owners and the
Paycheck Protection Program borrower fact sheet, visit https://governor.alabama.gov/newsroom/2020/04/governor-ivey-urges-alabama-small-business-owners-to-prepare-now-by-applying-for-federal-financial-relief/.