Loans for contractors play an important role during these unprecedented times. Therefore, the Coronavirus Aid, Relief and Economic Security (CARES) Act and the Paycheck Protection Program (PPP) is open for application, providing low-interest loans to meet short-term payroll needs for small and mid-size businesses.
The Small Business Administration (SBA) administers the PPP. It has been open for application by small business owners with less than 500 employees since April 3. Also, applications from independent contractors and self-employed borrowers started on April 10.
In addition, SBA will fully forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. Payroll must account for at least 75% of the loan for loan forgiveness. Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
Furthermore, forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness reduces if full-time headcount declines, or if salaries and wages decrease.
The loans have a maturity of 2 years and an interest rate of 1%.
The loans cover up to eight weeks of average monthly payroll, plus 25 percent.
We have collected the following information from third parties to help you understand these U.S. relief programs and your eligibility:
The U.S. Chamber of Commerce Coronavirus Small Business Guide addresses various stimulus aid programs, including emergency and disaster assistance loans.
Loans For Contractors
CARES Act programs
- Learn more about the small business Paycheck Protection Program at the U.S. Small Business Administration (SBA) and the U.S. Senate Committee on Small Business & Entrepreneurship.
- For midsized business, the McDonald Hopkins’ blog provides additional insights and resources.
Families First Coronavirus Response Act Programs (FFCRA)
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- Visit the U.S. Chamber of Commerce to learn about the FFCRA which includes new paid sick leave, paid FMLA, tax credits, and unemployment insurance information.
State and local government loans for contractors
- Please check government websites in your area related to their COVID-19 response and potential additional assistance for businesses.
So Amigos, will you take advantage of these programs? Comment below…
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