Graves explains Paycheck Protection Program for small businesses

(From Sixth District Congressman Sam Graves)

While all Americans have suffered during this coronavirus pandemic, our businesses have been facing unprecedented challenges. Virtually overnight, our economy ground to a halt. Revenues have dried up, and bills continue to pile up.

In an effort to help our small businesses, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) which included the new Paycheck Protection Program. It is designed to help small businesses keep workers employed during the coronavirus pandemic.

Under the program, any small business with less than 500 employees, including sole proprietorships, independent contractors, self-employed individuals, 501(c)3 organizations, and 501(c)19 veterans organizations impacted by COVID-19 is eligible. This includes many farmers and ranchers. Some employers with more than 500 employees may also be eligible if they meet the SBA’s size standards for their industry.

Under the Paycheck Protection Program, small businesses can apply for low-interest loans of up to 250 percent of their average monthly payroll to help cover fixed costs. The SBA will forgive loans if all employees are kept on payroll for eight weeks, all salaries are maintained, and the money is used to pay for payroll costs, mortgages, rent, or utilities.

The application process for the new loans started on Friday at participating Farm Credit System institutions as well as FDIC-insured banks and credit unions. Applications for Independent contractors and self-employed individuals will open on April 10th. It’s important to know that no fees will be charged to apply for a Paycheck Protection Program loan.

This program has been rolled out at a near record pace and it’s clear that businesses desperately need help. On Day One, 13,669 loans were processed through the Paycheck Protection Program in an effort to keep businesses operating and employees on the payroll. This is good news for small businesses, but there have also been some growing pains. The rules issued by the SBA have left some confusion out there and some financial institutions are not processing loans yet. The SBA is currently working to resolve these issues and process applications for the program as quickly as possible. I will continue working to make sure the SBA is issuing clear and concise guidance to all financial institutions, big and small alike.

The Paycheck Protection Program is one of many resources available to small businesses during this pandemic. I encourage you to work with your lender and find what program will best suit your business and your needs. Rest assured, if your lender is awaiting clarification from the SBA on this new program, they should get the answers they need soon and be able to start processing Paycheck Protection Program Applications shortly.

If you have questions about the Paycheck Protection Program or other resources available to help small businesses during this pandemic, please don’t hesitate to contact my office at: 816-792-3976 or email me.