Available retroactively from Feb. 15 so employers can rehire their recently laid off employees through June 30, the PPP is intended to help small businesses affected by COVID-19 float payroll and some other critical business operating expenses for an eight-week period. It will do so without collateral requirements, personal guarantees or SBA fees, all with a 10 percent guarantee from SBA.
Businesses can borrow up to $2 million at 1 percent interest to make payroll and keep the lights on. All loan payments will be deferred for six months. 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.
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Greater Hamilton Chamber of Commerce President and CEO Dan Bates said the loan is crucial to the country’s economy because the employees’ ability to be ready to return will expedite the economic recovery to generate cash flow for the businesses.
“In addition, employees are also consumers so if they feel secure in making purchases to the items they need, that also keeps the economy alive and ready to grow when the restrictions are lifted,” he said.
Every business and non-profit should be applying for the appropriate stream of funding, whether it is PPP, SBA Disaster or Economic Injury Disaster Loan Emergency Advance (EIDL) grants, Bates said. Visit www.SBA.gov/Coronavirus for more information on the Paycheck Protection Program.
Kert Radel, president and CEO of the Fairfield Chamber of Commerce, said the PPP is solely for businesses with less than 500 employees, not larger corporations like Cincinnati Financial or Bon Secours Mercy Health. He said. businesses should at least apply for the $10,000 EIDL grant, even if they do not intend to apply for the SBA’s PPP loan.
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“From what I’ve been told, the grant … it’s a pretty quick return,” Radel said. “You’re putting the routing number of your bank and they’re putting it in your account three to five days afterwards.”
Businesses must show they have been negatively affected by the pandemic and that it will take them a while to recover from it, Radel said.
SBA funding could be the determining factor in the survival of a business and, at the very least, keep an establishment’s employees secured for its future needs, Bates said.
He said several area institutions, including Telhio, First Financial, Kirsch CPA, US Bank and Valley Central Bank, each had over 20 applications ready to go awaiting the SBA to go live last week.
“I am guessing there are well over 100 businesses in the immediate Hamilton and surrounding area that have applied,” he said.
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Facts about SBA PPP Loan
• Who is eligible? 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
• Interest rate of 0.5 percent
• Loan forgiveness if proceeds used for payroll costs and other designated business operating expenses in the 8 weeks following the date of loan origination
• Specifically designed to help small businesses keep their workforce employed. Visit www.SBA.gov/Coronavirus for more information on the Paycheck Protection Program.
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