House Passes $2 Trillion Coronavirus Stimulus Package
The House of Representatives today approved the historic $2 trillion stimulus package that passed the Senate earlier this week. The bill now goes to President Donald Trump's desk for his signature as the American public and the US economy fight the spread of COVID-19.
Key elements of the package include sending checks directly to individuals and families, a major expansion of unemployment benefits, money for hard-hit hospitals and health care providers, financial assistance for small businesses and $500 billion in loans for distressed companies.
Legence Bank is an approved SBA Lender, awaiting additional details which will be provided as the SBA drafts implementing regulations, which the CARES Act requires to occur within 15 days. Only once these regulations are in place, can lenders begin making loans.
How Are PPP (Paycheck Protection Program) Loans Made?
PPP loans will be made by lenders who are currently approved as 7(a) lenders or who are approved by the SBA and the Treasury Department to become PPP lenders. PPP lenders are required to consider whether an applicant was in operation on February 15, 2020, and either had employees for whom it paid salaries and payroll taxes or paid independent contractors. Unlike other 7(a) loans, applicants are not required to show that credit is unavailable elsewhere or demonstrate repayment ability. PPP loans are backed by a 100% guaranty from SBA.
How Can PPP (Paycheck Protection Program) Loan Proceeds Be Used?
PPP loan proceeds are generally to be used for:
- Payroll costs, excluding payroll above $100,000 per year for any person
- Group healthcare benefit costs and insurance premiums
- Mortgage interest (but not prepayments or principal payments) and rent payments
- Interest on debt that existed as of February 15, 2020