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The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) establishes a new $349 billion Paycheck Protection Program (PPP). The PPP provides much-needed relief to millions of small businesses so they can sustain their businesses and keep their workers employed. The loans will be forgiven as long as the funds are used to keep employees on the payroll and for certain other expenses.
The goal of this Small Business Administration (SBA) program is to position lenders as the single point-of-contact for small businesses – the application, loan processing, and disbursement of funds will all be administered at the community level. Speed is the operative word; applications for the emergency capital began on April 3, 2020, with lenders using their own systems and processes to make the loans.
The new loan program helps small businesses with their payroll and other business operating expenses. It provides 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. 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.
Applications are being accepted now. The details of the PPP are still evolving (the rate doubled in the last few days). The available PPP funds are going fast, although there are signs that Congress may approve more funds.
This webinar program provides all of the critical details for financial institutions that want to jump start a PPP loan program for their borrowers.
Upon completion of the program attendees understand:
- The legal basis for the Paycheck Protection Program;
- The basic details of the PPP;
- Which financial institutions are currently eligible to offer PPP loans;
- How a financial institution can become immediately eligible to offer PPP loans;
- Which businesses are eligible to apply for and receive a PPP loan;
- The critical details of PPP loans, including, but not limited to:
- Acceptable loan purposes;
- Maximum loan amount;
- Interest rate and loan fees;
- Loan term and repayment terms;
- Debt forgiveness provisions;
- Applicant certifications;
- The application process, including:
- Sample application form;
- Lender's application for 7(a) guaranty;
- Lender Agreement
- Underwriting requirements; and
- SBA Affiliation rules and waiver.
This informative session is designed for loan department management, lenders, compliance officers, auditors, risk managers and anyone else involved in jump starting a Paycheck Protection Program.
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