URGENT INFORMATION ABOUT THE PAYROLL PROTECTION PROGRAM

The U.S. Department of Treasury has released the Payroll Protection Program application, important documentation regarding the Borrower Information Fact Sheet and the Lender Information Fact Sheet.  This urgent information should be reviewed and completed immediately if you plan to seek a loan under this program.  All loan terms will be the same for everyone.  Be certain to pay attention to the Application Form and obtain assistance if needed. It is critical to complete your application form accurately to prevent delays for submitting an incomplete application.

• Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and certain other expenses through existing SBA lenders.
• Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.

The loan amounts will be forgiven if the proceeds are used to cover payroll costs, and most mortgage interest, rent and utility costs over the 8-week period after the loan is made; and employee compensation levels are maintained.  Payroll costs are capped at $100,000 on an annualized basis for each employee.  It is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.

You will need to complete the application and submit to an approved lender that is available to process your application by June 30, 2020.

You are encouraged to apply as quickly as you can because there is a funding cap and lenders need time to process your loan.

All payments on the loan are deferred for 6 months.  Interest will accrue on the loan at a fixed interest rate of 0.50%.

There is no prepayment penalty or fees.  No collateral is required.  There is no personal guarantee requirement.

You will need to certify in good faith that:

• Current economic uncertainty makes the loan necessary to support your ongoing operations.
• The funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments.
• You have not and will not receive another loan under this program.
• You will provide to the lender documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting this loan.
• Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
• All the information you provided in your application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program is punishable by law.
• You acknowledge that the lender will calculate the eligible loan amount using the tax documents you submitted. You affirm that the tax documents are identical to those you submitted to the IRS. And you also understand, acknowledge, and agree that the lender can share the tax information with the SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews

Updated March 31, 2020

DISCLAIMER: The WM Daily Update COVID-19, COVID-19 Business Resources and COVID-19 Client News Alerts and other related communications are intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.