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Thursday, 02 April 2020 16:13

U.S. Treasury and SBA Begin Effort to Distribute $349 Billion in Emergency Small Business Capital

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Following President Donald Trump’s signing of the historic Coronavirus Aid, Relief, and Economic Security (CARES) Act, SBA Administrator Jovita Carranza and Treasury Secretary Steven T. Mnuchin on March 31 announced 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 to 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 Mnuchin. “Treasury and the Small Business Administration expect to have this program up and running by April 3, 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," said Carranza. "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.

 

“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.


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