Paycheck Protection Program

The Treasury Department and Small Business Administration stated that the SBA will resume accepting Paycheck Protection Program loan applications at 10:30 a.m. (Eastern time) this Monday, April 27.

In a joint statement, SBA Administrator Jovita Carranza and Treasury Secretary Steven Mnuchin said this will ensure the SBA has properly coded the system to account for changes made by the new law restarting the PPP.

They encouraged all approved lenders to process loan applications previously submitted by eligible borrowers and disburse funds expeditiously, noting that the PPP has supported more than 1.66 million small businesses and protected more than 30 million American jobs.

The SBA today issued an interim final rule with additional guidance on the program after President Trump signed into law the bill authorizing $310 billion in additional PPP funds.

The new law dedicates at least $30 billion for loans from institutions under $10 billion in assets and another $30 billion for those with between $10 billion and $50 billion in assets, reflecting ICBA and community banker calls for policymakers to dedicate program funds for loans from community banks under $50 billion in assets.

Bank of Botetourt will continue to work on the applications we receive and will work day and night in hopes of processing and submitting all the applications we have on hand for approval.

 

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) helps support businesses and families through the on-going novel coronavirus (COVID-19) pandemic.

In particular, the CARES Act expanded the SBA Section 7(a) loan program, also referred to as the “Paycheck Protection Program” (PPP), which aims to support small businesses. Bank of Botetourt is an approved SBA lender, and we value all of our small business customers. We are encouraging all our small business borrowers who are impacted by COVID-19 to consider applying for a loan under this new program, which provides some critical benefits, including:

  1. Cash to cover select business expenses (such as employee salaries and payroll support, retirement benefits, rent or mortgage and utilities payments, insurance premiums)
  2. 6 months of deferred loan payments 
  3. Potential Loan forgiveness (a portion, or possibly all, of your loan may be forgiven)

Key Points to Know:

  • Length of a PPP loan: 2 years
  • Interest rate on a PPP loan: 1%
  • Maximum dollar amount of a PPP loan: 2.5x of your average total monthly payments for payroll costs of the business during the 1-year period before the loan is made. Payroll costs include salary, wage, retirement benefits, vacation, parental, family, medical or sick leave, severance, health care benefits, and local taxes.
  • Last day to apply for a PPP loan: June 30, 2020
    **BUT, please note that it takes time for you to complete the application and to process your approval.
    **Also, note that there is a limited amount of funds available under the CARES Act for PPP loans.

Available Resources:

Application Form
Fact Sheet 
SBA’s information on Paycheck Protection Program
Checklist for Borrowers

Please contact Bank of Botetourt at 540-591-5000 or call your lender to discuss.

 

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