Small Business Administration loan applications open Friday, April 3, 2020

Published Thursday, April 2, 2020

The U.S. Treasury Department has released the application for the Small Business Administration's 7(a) Paycheck Protection Program loans. It has also released a summary guide of the program for borrowers.

Small businesses and sole proprietors can apply beginning this Friday, April 3; independent contractors and the self-employed can apply beginning next Friday, April 10. Applications go directly to SBA lenders, which you can find through the SBA site.

About PPP Loans

The Paycheck Protection Program was created by the CARES Act to provide small businesses (500 employees or fewer), sole proprietors, and the self-employed/independent contracts who are impacted by COVID-19 with loans of 2.5x their average monthly payroll expenses (up to $10 million) to cover payroll, mortgage interest, rent, and utilities for an 8-week period during the crisis. Employers who maintain payroll levels of at least 75% of their average and the same number of employees are eligible for loan forgiveness. You can learn more about the loan program in the National Association of REALTORS' CARES Act FAQ and CARES Act Summary.

There are still some questions as to if a small business should include independent contractors in its employee numbers and payroll costs; according to NAR, independent contractors can apply for their own 7(a) PPP loans. NAR is seeking clarity on that question from the Treasury and the SBA.

NAR anticipates posting a SBA-program specific FAQ focusing on the 7(a) PPP loans and the Economic Injury Disaster loans. (Businesses can apply for both, but the funds cannot be used for the same purposes, and the $10,000 advance grant is not forgiven if you also receive a forgivable PPP loan.)