U.S. Congressman Jim McGovern | E-Newsletter
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U.S. Congressman Jim McGovern
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    CARES Act establishes a new $349 billion Paycheck Protection Program  
 
Dear Business Leaders: 

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.

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. SBA expects to have this program up and running by April 3rd. 

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 small 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 0.5%
    • 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

SBA’s announcement comes on the heels of a series of steps taken by the Agency since the President’s Emergency Declaration to expeditiously provide capital to financially distressed businesses affected by the Coronavirus (COVID-19) pandemic. Since March 17, SBA has taken the following steps:

  • 1-year deferment on Economic Injury Disaster Loans provided due to COVID-19
  • Waiver of garnishments through 2020

Visit SBA.gov/Coronavirus for more information on SBA’s assistance to all small businesses.

I hope you find this information helpful. If I can be of further assistance on this or any other matter please do not hesitate to contact my office. 


Sincerely,

James P. McGovern 
Member of Congress 


 

Washington, DC Office
438 Cannon HOB
Washington, DC 20515
phone: 202-225-6101
fax: 202-225-5759
hours: M-F 9-5:30pm
Leominster Office
24 Church Street, Room 29
Leominster, MA 01453
phone: 978-466-3552
fax: 978-466-3973
hours: M-F 9-5:00pm
Northampton Office
94 Pleasant Street
Northampton, MA 01060
phone: 413-341-8700
fax: 413-584-1216
hours: M-F 9-5:00pm
Worcester Office
12 East Worcester Street, Ste 1
Worcester, MA 01604
phone: 508-831-7356
fax: 508-754-0982
hours: M-F 9-5:00pm
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