The federal government has approved several loan programs to support our economy during this pandemic.  They are described in detail at the Small Business Administration’s website, SBA.gov.  The most attractive and aggressive program for small businesses and not-for-profit organizations is the Paycheck Protection Program (“PPP”), designed to help small employers keep their workforce on the payroll.   We want to encourage EVERY eligible business or organization to apply immediately for this aid.

Here are some key facts about the PPP.

  • $349 Billion has been approved for loans under the PPP.  Over 275,000 applications for $75 billion in loans were applied for in the first two days of the program.  Federal officials are already talking about increasing funding by as much as $250 billion, expecting the current authorized funding will run out quickly.  There is no guarantee these additional funds will ultimately be approved. 
  • PPP offers several key advantages or any other lending program ever offered by the SBA.  First and foremost, borrower’s loans will be forgiven if all loan proceeds are used for “forgivable purposes.”  Forgivable purposes include payroll for up to eight weeks plus rent, mortgage, utility and other costs related to employment, such as sick leave, health insurance, and state and local taxes.  FICA and other federal taxes will still need to be paid by the borrower.
  • There is no requirement that employees actually return to the workplace or even work from home under this program.  You can pay your employees to stay home   during the lockdown. 
  • The PPP loans will be for a term of up to two years, with an interest rate of as little as 0.5%.  No payments are required in the first six months, and no payments will be required at all if borrowers meet the requirements for full forgiveness of both principal and interest.
  • No personal guarantees of the debt and no pledges of collateral are required for PPP loans. 
  • Loans are available to all forms of small business, including corporations, limited partnerships, sole proprietorships, independent contractors, and not-for-profit organizations.

TO APPLY FOR A PPP LOAN: submit the application form along with payroll and other qualifying expense records to a participating lender.  ALL BANKS in Sierra County are authorized SBA lenders, but none have stated specifically that they are accepting PPP loan applications.  It is recommended that you start with your local bank where you keep your deposit accounts.  If you have borrowed from that bank in the past, so much the better.  You may want to make an appointment to submit your application so that you can discuss it with the banker.  You could also put your application in an envelope and drop it off at the bank drive-up or in its’ night depository slot.  In any case, you should move quickly, while funds are still available!


Useful Links:

 Small Business Administration


US Treasury

 The City of Truth or Consequences reminds you to Stay Home and Practice Social Distancing