From the beginning, SpaceCraft’s mission has always been to help small businesses grow, and that mission remains, even through the challenges and difficulties the coronavirus pandemic presents. To that end, we’d like you to be aware of the Paycheck Protection Plan, which was included in the recently passed CARES Act. It’s no secret that recent events have dramatically affected small businesses like yours across the country, and we hope that this information can help you find the resources that you need to make it through this difficult time.
As part of the $2 trillion stimulus package, the government created the Paycheck Protection Plan (PPP) for qualified small businesses. Under the law, entities can use the funds to make payroll and cover other expenses, including rent, utilities, mortgage interest, and interest on other debt obligations from February 15, 2020, to June 30, 2020. Eligible entities may borrow up to $10 million, based on a formula tied to 2.5 times average monthly payroll. These loans require no collateral, no personal guarantees, carry no prepayment penalties, and are offered at 4 percent interest. Furthermore, some or all of these loans may be fully forgiven under certain circumstances. Additionally, because these loans are guaranteed by the US government, underwriting requirements from banks should be limited.
These loans are being offered by any of the 1,800 approved SBA lenders in the country. Odds are, your current bank is already an approved SBA lender. We recommend all qualified businesses contact their current bank to see about potentially securing one of these loans as soon as possible. The CARES Act has set aside $350 billion for these loans, and we believe this program will be very popular. There is an excellent chance that demand for these loans will quickly exhaust the $350 billion carve-out.
We’ve outlined some more specific details of the loans below: