Payroll Protection Program for Small Businesses in MN
As part of the federal stimulus package signed into law on March 27 th , 2020, the SBA will offer loans under the Payroll Protection Program as an incentive for small businesses to retain and pay their workers during the COVID-19 pandemic. SBA approved lenders will begin processing applications today, April 3, 2020.
The Payroll Protection Program offers SBA Section 7(a)(36) loans through June 30, 2020. The loans provide up to $10 million in relief to small businesses in the United States who need funds to support their ongoing operations due to the economic impact of COVID-19. Maximum loan amounts are determined on a per-borrower basis and are calculated using the borrower’s payroll costs. There are no fees for borrowing and the interest rate on the loans are set at 0.5%, maturing in 2 years.
- Businesses with less than 500 workers may apply for a Payroll Protection Program loan.
- Businesses with more than 500 workers may apply if they meet the SBA industry size standards for small businesses.
- Businesses in the hospitality or food service industry may apply on a per location basis if they employ less than 500 employees per physical location.
Payroll Protection Program loans are offered without requiring the borrower to give collateral or personal guarantees. Borrowers do not need to seek credit elsewhere before application.
The portion of the loan spent on payroll, rent, utilities, or mortgage interest, during the first eight weeks after receiving the loan will be forgiven without tax consequence. Reducing payroll or your average number of employees may reduce the forgiven amount. Employers who already reduced their workforce may still qualify for loan forgiveness if they quickly rehire those workers. If your business would like help applying for a loan under the Payroll Protection Program our office is here to help. Please reach out to us with questions or for assistance at firstname.lastname@example.org or call Tina M. Johnson, RP® of Kennedy Law Office at 651-262-2080.