The COVID-19 pandemic has created uncertainty and potential hardship for small businesses, but the U.S. Small Business Administration (SBA) has several programs designed to help small businesses endure the pandemic.
The Paycheck Protection Program, is one of those programs. It is an SBA loan that helps businesses keep their workforce employed during the COVID-19 crisis, by providing an incentive for small businesses to keep workers on their payroll.
The incentive comes from the fact the SBA will forgive the loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. Loans can also feature payments that are deferred for six months. No collateral or personal guarantees are required. Loan maturity is two years, with an interest rate of 1%.
The Paycheck Protection Program is for any small business with less than 500 employees, including sole proprietorships, independent contractors and self-employed persons, among other organizations.
The SBA has other programs available to help small businesses work through these trying times, including disaster assistance and enhanced debt relief.
For more information about specifics for the above programs, visit www.sba.gov