Loan Forgiveness Relief
Last week we told you about the recently-passed Paycheck Protection Program Flexibility Act. One of the favorable provisions in this law was reducing the requirement that 75% of a borrower’s loan proceeds be used on payroll costs. The new limit is 60%. There was concern when the law originally passed that the 60% limit was an all or nothing test. We now know that not to be the case. In a joint statement earlier this week, the SBA and Treasury announced that partial loan forgiveness is still available if less than 60% of the loan was used for payroll.
Main Street Lending Program
The Federal Reserve Board announced earlier this week that it was making changes to its Main Street Lending Program in an effort to make it possible for more small and medium-sized businesses to qualify. While this program has been in the works for months, it is expected to finally launch this week. The key provisions of this program include:
- Loans ranging from $250,000 to $300 million
- Terms of 5 years
- Delayed principal payments for 2 years
- Interest rate of LIBOR plus 300 basis points
This program was designed to assist those companies too large for the Paycheck Protection Program (PPP). However, having an SBA PPP or EIDL loan does not preclude you from borrowing under this program. Find more information here.
Please contact your DunlapSLK team member with any questions. We are here to help!