Funding Is Available For Businesses To Pay Employees Through Paycheck Protection Program

Alonzo Simpson
April 3, 2020

The Paycheck Protection Program. provides forgivable Small Business Administration loans up to $10 million for small businesses to cover eight weeks of payroll, group healthcare benefits, lease payments and mortgage interest, U.S. Senator Pat Roberts (R-Kan.) explains.

Still, small businesses are unlikely to see the big banks' foot-dragging as admirable prudence - not when those same banks fell all over themselves to get 2008's TARP bailout passed as soon as possible after the market collapse without a care for regulations or the program's workability. Neither the government nor lenders will charge small businesses any fees for these loans.

The Paycheck Protection Program - part of the $2 trillion relief package signed into law last week - was billed as a way to help local businesses that often form the fabric of communities retain workers and pay bills.

President Donald Trump's Paycheck Protection Program (PPP) through the Department of Treasury and Small Business Administration has already on its first day pushed out more than $620 million to small businesses nationwide mostly through community banks.

On April 10 the application opens for independent contractors and sole proprietors.

"All across MI, small businesses and families are doing their part to mitigate the spread of COVID-19, but this unprecedented time has, understandably, created uncertainty for many employers", Gilchrist said. Although JPMorgan Chase initially said it will not accept applications on Friday, citing lack of guidance from the Treasury Department, the nation's largest bank reversed course Friday afternoon and said it will begin processing applications.

While Congress could approve more money later on, the program as it stands is expected to run out quickly.

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"I'm certain that's what's going to happen", said Lauren Friel, the owner of a wine bar in Somerville, Massachusetts, that has been closed for three weeks. The $350 billion segment of the $2 trillion coronavirus fiscal stimulus package signed into law last month was created to give the small and medium-sized enterprises a nice low-interest (0.5 percent) loan to tide them through the crisis. By then, banks could be overwhelmed with applications. Every big restaurant and hotel chain is going to be going after this money.

If the businesses keep their workers on the payroll, they don't have to pay back the money.

"Banks are working to get money out the door as quickly as possible", a spokesman for industry group the Consumer Bankers Association told Politico, explaining they simply don't want to be subjected to "unlimited potential liability for things that they can not control". You can find eligible franchises listed on the SBA Franchise directory. Many nonprofits, which are normally ineligible for such aid, also qualify.

Liberty Bank in Middletown, Conn., had set aside $5 million to make unsecured personal loans of up to $5,000 to customers who have lost incomedue to the economic fallout from the novel coronavirus.

"It is my 100% total focus just to survive and keep the infrastructure in place, so there is a home for our employees to come back to", Flynn said.

But for now, business owners who wait or have problems filing their applications might lose out to larger applicants, said Veronique de Rugy, a research fellow at George Mason University. "This loan is make or break for our business and employees and we are unable to apply".

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