The following questions were submitted by participants of the April 6 webcast “What the bailout means for small-business owners.” For more on federal relief loans for business owners, tune in for our weekly podcast Crain’s Small Business Lifeline.
Q. How do I apply for the Paycheck Protection Program?
A. Applications for the PPP are done online or over the phone with a small-business owner’s bank or a non-bank lender. The U.S. Small Business Administration does not run the PPP loan fund; it has allocated lending and underwriting responsibilities to individual banks across the nation. Up to 5,000 institutions, from large-scale banks such as JPMorgan Chase to smaller commercial banks and non-bank lenders, are participating in the program.
Q. When does repayment begin for the PPP?
A. The repayment for the plan begins no later than six months after the loan begins. The loan may be repaid over two years at an interest rate of 1 percent. The payments are for those portions of the loan that were not forgiven after being applied to eligible costs.
Q. How is the loan amount calculated?
A. Any business of fewer than 500 employees that existed before Feb. 15 can access a forgivable PPP loan of up to $10 million, although the loan amount is calculated as being two and a half times the average total monthly payroll cost for each individual business. Borrowers must certify that they will