On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provides the two following loan assistance programs for small business owners and non-profits:
Relief for business
owners
First, The Paycheck Protection Program (PPP) – Through this loan program, Continental Bank can offer SBA loans to eligible businesses to cover costs such as payroll support, employee salaries, rent, utilities, and other debt obligations. These loans are in high demand because they generously offer:
- Maximum loan amount up to $10 million
- Interest rate of 1.0%
- Loan forgiveness eligibility for proceeds used in the first 24 weeks
- Maturity up to 5 years
- First payment deferred for 6 months
- 100% guarantee by SBA
- No collateral
- No personal guarantees
- No borrower fees payable to Continental Bank or the SBA
Second, The Economic Injury Disaster Loan (EIDL) program – The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to help overcome the temporary loss of revenue they are experiencing. This program is administered directly through the SBA and offers low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of COVID-19. To apply for these loans and determine eligibility, visit https://disasterloan.sba.gov/ela/.
Relief for business
owners
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provides the two following loan assistance programs for small business owners and non-profits:
First, The Paycheck Protection Program (PPP) – Through this loan program, Continental Bank can offer SBA loans to eligible businesses to cover costs such as payroll support, employee salaries, rent, utilities, and other debt obligations. These loans are in high demand because they generously offer:
- Maximum loan amount up to $10 million
- Interest rate of 1.0%
- Loan forgiveness eligibility for proceeds used in the first 24 weeks
- Maturity up to 5 years
- First payment deferred for 6 months
- 100% guarantee by SBA
- No collateral
- No personal guarantees
- No borrower fees payable to Continental Bank or the SBA
Second, The Economic Injury Disaster Loan (EIDL) program – The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to help overcome the temporary loss of revenue they are experiencing. This program is administered directly through the SBA and offers low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of COVID-19. To apply for these loans and determine eligibility, visit https://disasterloan.sba.gov/ela/.
FAQs
When can I apply?
- The SBA has announced that starting April 3, 2020, small businesses and sole proprietorships can apply for loans through the Paycheck Protection Program. Continental will be ready to accept applications at that time (pending the SBA’s final application details).
- In line with SBA guidelines, starting April 10, 2020, we will accept applications from independent contractors and self-employed individuals.
Who is eligible?
- All small businesses — including nonprofits, veterans organizations, tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors — with 500 or fewer employees can apply.
- Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries.
How can I prepare to apply?
Although some sample drafts of the application have been published online, the SBA has not yet released its final application requirements. To avoid duplicating work before the application requirements are finalized, we encourage you to gather the following documentation:
- Average monthly payroll for 2019¹ on an annualized basis for each employee
- Seasonal businesses may elect to provide average monthly payroll from February 15, 2019 to June 30, 2019, on an annualized basis for each employee
- New businesses: average monthly payroll may be calculated using the time period from January 1, 2020 to February 29, 2020, excluding costs over $100,000.
- Entity documents including Articles of Incorporation or Organization, Bylaws and Partnership Agreements as applicable will likely be needed as well.
We encourage you to apply quickly, as funds are limited.
How much can I borrow?
The eligible loan amount determined by combining the following payroll categories into a monthly average and multiplying the result by 2.5X, not to exceed $10 million:
- Salary, wages, commissions, tips (capped at $100,000 annualized for each employee)
- Employee benefits including: vacation, parental, family, medical or sick leave; allowance for separation or dismissal; payments for group health care benefits including insurance premiums and payment of any retirement benefit
- State and local taxes assessed on compensation
- For sole proprietor or independent contractors: wages, commissions, income, or net earnings from self-employment capped at $100,000 on an annualized basis for each employee
What can I use the loan for?
- Payroll costs — including benefits
- Interest on mortgage obligations, incurred before February 15, 2020
- Rent, under lease agreements in force before February 15, 2020
- Utilities, for which service began before February 15, 2020
Will the loan be forgiven?
Funds are provided in the form of loans that can be fully forgiven when employee and compensation levels are maintained and when loan proceeds 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).
Learn more about loan forgiveness from the SBA here. Read the article with our most current updates here
Learn more about loan forgiveness from the SBA here. Read the article with our most current updates here
What are the loan terms?
- 1.00% fixed rate
- up to 5-year term; no prepayment penalties or fees
- No collateral or personal guarantee required
- All payments are deferred for 6 months; however, interest will continue to accrue over this period
Learn more about loan details here.
When can I apply?
- The SBA has announced that starting April 3, 2020, small businesses and sole proprietorships can apply for loans through the Paycheck Protection Program. Continental will be ready to accept applications at that time (pending the SBA’s final application details).
- In line with SBA guidelines, starting April 10, 2020, we will accept applications from independent contractors and self-employed individuals.
Who is eligible?
- All small businesses — including nonprofits, veterans organizations, tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors — with 500 or fewer employees can apply.
- Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries.
How can I prepare to apply?
Although some sample drafts of the application have been published online, the SBA has not yet released its final application requirements. To avoid duplicating work before the application requirements are finalized, we encourage you to gather the following documentation:
- Average monthly payroll for 2019¹ on an annualized basis for each employee
- Seasonal businesses may elect to provide average monthly payroll from February 15, 2019 to June 30, 2019, on an annualized basis for each employee
- New businesses: average monthly payroll may be calculated using the time period from January 1, 2020 to February 29, 2020, excluding costs over $100,000.
- Entity documents including Articles of Incorporation or Organization, Bylaws and Partnership Agreements as applicable will likely be needed as well.
We encourage you to apply quickly, as funds are limited.
How much can I borrow?
The eligible loan amount determined by combining the following payroll categories into a monthly average and multiplying the result by 2.5X, not to exceed $10 million:
- Salary, wages, commissions, tips (capped at $100,000 annualized for each employee)
- Employee benefits including: vacation, parental, family, medical or sick leave; allowance for separation or dismissal; payments for group health care benefits including insurance premiums and payment of any retirement benefit
- State and local taxes assessed on compensation
- For sole proprietor or independent contractors: wages, commissions, income, or net earnings from self-employment capped at $100,000 on an annualized basis for each employee
What can I use the loan for?
- Payroll costs — including benefits
- Interest on mortgage obligations, incurred before February 15, 2020
- Rent, under lease agreements in force before February 15, 2020
- Utilities, for which service began before February 15, 2020
Will these loans be forgiven?
Funds are provided in the form of loans that can be fully forgiven when employee and compensation levels are maintained and when loan proceeds 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).
Learn more about loan forgiveness from the SBA here. Read the article with our most current updates here.
Learn more about loan forgiveness from the SBA here. Read the article with our most current updates here.
What are the loan terms?
- 1.00% fixed rate
- 2-year term; no prepayment penalties or fees
- No collateral or personal guarantee required
- All payments are deferred for 6 months; however, interest will continue to accrue over this period
Learn more about loan details here.
CONTINENTAL Bank is determined to help both our customers and community in times of need.
CONTINENTAL Bank is determined to help both our customers and community in times of need.
Reach Out to us online
Have more questions about the relief act or general information questions about how Continental can help your business?
Reach Out to us online
Have more questions about the relief act or general questions about how Continental can help your business?
Need some help?
Need some help?
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