With $349 Billion in Emergency Small Business Capital Cleared, Treasury and SBA Begin Unprecedented Public-Private Mobilization Effort to Di

Summary

A U.S. Department of the Treasury press release dated March 31, 2020, announcing that SBA Administrator Jovita Carranza and Treasury Secretary Steven T. Mnuchin have begun mobilizing banks and other lenders to distribute funds under the new $349 billion Paycheck Protection Program established by the CARES Act. Mnuchin is quoted as expecting the program to be running by April 3rd. The release lists loan terms: eligibility for businesses with 500 or fewer employees, a maximum loan of up to $10 million, an interest rate of 1%, a maturity of 2 years, a first payment deferred for six months and a 100% guarantee by SBA. It says the program is retroactive from Feb. 15, 2020, so employers can rehire laid-off employees through June 30, 2020.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

U.S. Department of the Treasury

Press Releases

With $349 Billion in Emergency Small Business Capital Cleared, Treasury and SBA Begin Unprecedented Public-Private Mobilization Effort to Distribute Funds

March 31, 2020

WASHINGTON – Following President Trump’s signing of the historic Coronavirus Aid, Relief, and Economic Security (CARES) Act, SBA Administrator Jovita Carranza and Treasury Secretary Steven T. Mnuchin today announced that the SBA and Treasury Department have initiated a robust mobilization effort of banks and other lending institutions to provide small businesses with the capital they need.

The CARES Act establishes a new $349 billion Paycheck Protection Program. The Program will provide much-needed relief to millions of small businesses so they can sustain their businesses and keep their workers employed.

“This legislation provides small business job retention loans to provide eight weeks of payroll and certain overhead to keep workers employed,” said Secretary Mnuchin. “Treasury and the Small Business Administration expect to have this program up and running by April 3rd so that businesses can go to a participating SBA 7(a) lender, bank, or credit union, apply for a loan, and be approved on the same day. The loans will be forgiven as long as the funds are used to keep employees on the payroll and for certain other expenses.”

“This unprecedented public-private partnership is going to assist small businesses with accessing capital quickly. Our goal is to position lenders as the single point-of-contact for small businesses – the application, loan processing, and disbursement of funds will all be administered at the community level,” said Administrator Carranza. “Speed is the operative word; applications for the emergency capital can begin as early as this week, with lenders using their own systems and processes to make these loans. We remain committed to supporting our nation’s more than 30 million small businesses and their employees, so that they can continue to be the fuel for our nation’s economic engine.”

The new loan program will help small businesses with their payroll and other business operating expenses. It will provide critical capital to businesses without collateral requirements, personal guarantees, or SBA fees – all with a 100% guarantee from SBA. All loan payments will be deferred for six months. Most importantly, the SBA will forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll costs, rent, utilities, and mortgage interest.

The Paycheck Protection Program is specifically designed to help small businesses keep their workforce employed. Visit SBA.gov/Coronavirus for more information on the Paycheck Protection Program.

- The new loan program will be available retroactive from Feb. 15, 2020, so employers can rehire their recently laid-off employees through June 30, 2020.

Loan Terms & Conditions

- Eligible businesses: All businesses, including non-profits, Veterans organizations, Tribal concerns, sole proprietorships, self-employed individuals, and independent contractors, with 500 or fewer employees, or no greater than the number of employees set by the SBA as the size standard for certain industries
- Maximum loan amount up to $10 million
- Loan forgiveness if proceeds used for payroll costs and other designated business operating expenses in the 8 weeks following the date of loan origination (due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs)
- All loans under this program will have the following identical features: Interest rate of 1% Maturity of 2 years First payment deferred for six months 100% guarantee by SBA No collateral No personal guarantees No borrower or lender fees payable to SBA

Visit treasury.gov/cares for more information on SBA’s assistance to small businesses.

####

Use featured image

Off

File and source

File

ms_0102_home-treasury-gov-news-press-releases-sm961.html

Size

116,861 bytes

SHA-256

2e2d23c51280ed5e52dcb122b445a1231e49fe16c974b4ac91eab647c9849354

Our copy

ms_0102_home-treasury-gov-news-press-releases-sm961.html

Original

No public link identified.