Application and Guidance Now Available for SBA Paycheck Protection Program

Application and Guidance Now Available for SBA Paycheck Protection Program
Posted by   Michael Cashton Apr 3, 2020

Since announcing the Paycheck Protection Program, a component of the Coronavirus Aid, Relief and Economic Security Act or CARES Act, the Small Business Administration (SBA) has released both the loan application and additional guidance for prospective borrowers. The Program makes available $349 billion for loans to small businesses to help prevent their collapse during the COVID-19 public health crisis. 

If you intend to apply for a loan under the Paycheck Protection Program (the “Program”), it is essential that you begin taking steps to do so NOW, including familiarizing yourself with the following key SBA updates:

  1. SBA Applications are now available, and today is the first day you can apply:

  • Click here for the SBA-approved loan application

  • Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply.

  • You will need to complete the Program loan application and submit the application with the required documentation to an approved SBA lender that is available to process your application by June 30, 2020. The SBA is not processing the loans.

  1. Updated terms and conditions:

  • The SBA has determined that all loan terms will be the same for all borrowers

  • The interest rate is set at 1.0% (not the previously announced 0.5%)

  • The loan term is set at 2 years (pre-payment is allowed without penalty)

  • The deferral period is set at 6 months (interest accrues during this time)

  1. New use and forgiveness restrictions:
    Current regulations now require that at least 75 percent of the loan proceeds must be used for payroll costs. This means that not more than 25 percent of the loan amount may be used for non-payroll costs (mortgage, interest, rent, and utilities). The amount of the loan that is subject to forgiveness (covering the first 8 weeks of the loan period) are also subject to these restrictions.

  2. Funds are limited:
    Only $349 billion is available to lend. The SBA has announced that these loans are available on a “first-come, first-served” basis.

  3. Fact sheet for borrowers:
    The Treasury Department has created a Fact Sheet for borrowers to provide guidance during the application process.

We are available to assist with your questions about the Program or loan application process. For more information about the Program, or for general business questions, please contact Michael Cashton at [email protected] or 401-744-9647.


Michael Cashton is a member of our New England-based team and brings over 20 years of experience representing emerging businesses, major corporations, and individual entrepreneurs across a range of industries, including consumer goods, SaaS/PaaS, ad-tech, digital gaming, e-commerce, retail, food service, and arts/entertainment. Before joining Outside GC, Michael served as VP of Legal for Hasbro, Inc., an international consumer products and branded entertainment company. He can be reached at [email protected] or 401-744-9647.

This publication should not be construed as legal advice or a legal opinion on any specific facts or circumstances not an offer to represent you. It is not intended to create, and receipt does not constitute, an attorney-client relationship. The contents are intended for general informational purposes only, and you are urged to consult your attorney concerning any particular situation and any specific legal questions you may have. Pursuant to applicable rules of professional conduct, portions of this publication may constitute Attorney Advertising.

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