U.S. Treasury Department Issues Guidance on Paycheck Protection Program
Today, March 31, 2020, the U.S. Treasury Department issued Guidance on the Paycheck Protection Program for lenders and borrowers. To access this Guidance, please click here and you will be directed to the U.S. Treasury Website. Information relating to the Paycheck Protection Program can be found under the heading “Assistance for Small Businesses.” The application for borrowers is also available on this website.
The Guidance provides that small businesses and sole proprietorships can apply for loans starting on April 3, 2020 through any existing SBA 7(a) lenders or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Independent Contractors and self-employed individuals can start applying on April 10, 2020. Differing from the CARES Act which provided that the maximum interest rate would be 4% and the maximum loan term would be 10 years, the Guidance provides that the loans will have a fixed interest rate of 0.5% with a maturity term of 2 years. The Guidance also provides that loan payments will be deferred for 6 months.
Boardman Clark published a Q & A for Lenders on the CARES ACT Paycheck Protection Program, which will be updated to reflect the Treasury Guidance.
DISCLAIMER: The information provided is for general informational purposes only. This post is not updated to account for changes in the law and should not be considered tax or legal advice. This article is not intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.