Paycheck Protection Program Loan Changes
The Small Business Administration provided changes overnight for the Paycheck Protection Program Loans. Some of the major changes are:
Usage of loan funds – not more than 75% can be used for payroll and the remaining funds can be used for specific expenses.
Amount of Loan – Using amounts paid to Independent Contractors (I/C) as part of payroll costs for applying for the loan is still unclear. I/C can apply for their own assistance, therefore the thinking is that I/C costs should not be included in the amount allowed to be lent to the business. More to come on this…
The interest rate has been increased from 0.5% to 1% to allow for more banks to participate in the program.
Please note, many banks have sent notice to their customers that they are still working on getting their application process ready. This is causing delays for many of our clients to apply for this loan. We have found most banks are emailing their customers updates. We recommend you contact your bank with questions on the application process.
