(WJMN) – The second round of applications is now being accepted for the Paycheck Protection Program (PPP).
According to the U.S. Department of the Treasury, the Paycheck Protection Program provides small businesses with funds to pay up to eight weeks of payroll costs including benefits. The program is a part of the Coronavirus Aid, Relief, and Economic Security Act that was passed by Congress and signed into law by President Trump back in March.
PPP funds can also be used to pay interest on mortgages, rent, and utilities. Community banks were specifically allocated $60 billion to assist with their PPP efforts. First National Bank & Trust in Iron Mountain is one of those banks assisting its community members.
“We’ve had a pretty big impact, along with all the other local community banks as well, providing this resource to the businesses here. But the big thing is seeing the businesses being so thankful saying ‘Hey I really appreciate you guys doing this’,” said Russell Kassin, the senior vice president and the chief lending officer at First National Bank & Trust.
Funds are provided in the form of loans that will be fully forgiven when used for payroll costs,
interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the
forgiven amount must have been used for payroll).
“The loan can be forgiven completely. I mean, they already set it up at a very low-interest rate and no costs to the borrower. But it’s set up as a loan. So if you don’t spend the money correctly, you will have to pay it back,” said Kassin.
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.
So who can apply for the PPP?
Small businesses with 500 or fewer employees including nonprofits, veterans organizations,
tribal concerns, self-employed individuals, sole proprietorships, and independent contractors are eligible. Businesses with more than 500 employees are eligible in certain industries.
You can apply through any existing SBA lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating.
For more information about the CARES Act and the Payment Protection Program, click here.