Banks are preparing to start processing applications Friday from small businesses and nonprofits seeking forgivable loans through the new Paycheck Protection Program.
Bank of Jackson Hole CEO Pete Lawton and President Jim Ryan said they are seeing a lot of interest. They’ve started a master list, and it had 100 names as of Thursday morning. Most businesses were seeking amounts in the $50,000 to $100,000 range, though some seek much more.
The Paycheck Protection Program, administered through the Small Business Administration, was created by Congress as part of the Coronavirus Aid, Relief and Economic Security, or CARES, Act.
Congress allocated nearly $350 billion for paycheck protection loans to give small businesses an incentive to keep workers on their payroll. Self-employed individuals and independent contractors can apply, too, starting April 10.
The loans, based on eight weeks of payroll, will be for two years, with 0.5% interest, according to the SBA.
“The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll),” the SBA 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.
“Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.”
As of Thursday morning, Bank of Jackson Hole officials said, banks were waiting for SBA guidance on required documents and other details about processing the loans. They are putting together a production line to handle the workload and are preparing to devote extra hours to accommodate.
“We’re going to get a gazillion applications,” Ryan said. “We’ll prioritize them based on dire need.”
To see a sample application form on the SBA.gov website, go to TinyURL.com/qkbgf24. General details can be found at SBA.gov and on the Treasury Department’s detailed fact sheet at TinyURL.com/t6ytn6w.
The Community Foundation of Jackson Hole circulated a list of SBA lenders and noted that more could be added. Among the other locally operating institutions on the list besides Bank of Jackson Hole are Rocky Mountain Bank, Wells Fargo, First Interstate Bank, Zions Bank and First Republic Bank. See the list at TinyURL.com/uljakfb.