LAFOLLETTE, TN (WLAF) -In hopes of keeping small businesses open during the COVID-19 pandemic, and as part of the stimulus package from the federal government, a Paycheck Protection Program has been put in place.
This is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
Managed by the Small Business Administration (SBA), the loan is meant to provide an influx of cash so small businesses can stay open. The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
The loans are available through local lenders. Bryan Horton of First National Bank said he and his staff began accepting loan applications over a week ago. “A two page application and 12 months of the 941 payroll tax form begins the loan process,” he said.
The bank staff then inputs that information into the SBA loan portal. However, with the number of lenders across the country completing the same process, the SBA site had been crashing, delaying the applications being filed.
“Some of the applications that been put into the system received a registration number meaning they could move to the next step in the process. But that number didn’t translate into a loan approval, it was just an acknowledgement the application was received,” Horton said.
“This product could be a great thing,” he said. “Our community is built on small businesses.”
Horton did caution that while the SBA said the loan could be forgiven, there was no guarantee. The loans will eventually be reviewed, and if at least 60-percent of the loan didn’t directly fund payroll, a repayment plan could be put in place,” he said.
“The idea behind the loans is to help employers take care of their people,” Horton said.
Loan payments will also be deferred for six months. No collateral or personal guarantees are required; neither the government nor lenders will charge small businesses any fees, according to the SBA website.
The program will be available through June 30, 2020. See a full list of local lenders participating in the program HERE. (WLAF NEWS PUBLISHED- 04/15/2020-6AM)