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Paycheck Protection Program Update

Since our last client alert on economic relief programs, the Treasury Department has issued additional guidance relating to the Paycheck Protection Program (including a sample PPP application, found here) and the new federal/Treasury loan program. To view the documents and guidance provided on the Treasury’s site, please click here.

Of note from the guidance is the following.

Loan Details

The Treasury Department has indicated that all loan terms will be the same for everyone, regardless of borrower or lender. In addition, the Treasury has noted that loan forgiveness for loan amounts used on non-payroll costs will likely be capped at 25%.

The Treasury guidance also indicates that the interest rate on the payroll loans will be a .5% fixed rate, and while all payments are deferred for 6 months, interest will accrue during those months. Per the Treasury guidance, the payroll loan will be due in two years.

Loan Forgiveness

The Treasury guidance also makes clear that the process to request loan forgiveness will be run though the payroll lender that is servicing your loan, and that the lender will make a determination on forgiveness within 60 days. Additional information that will be required for the forgiveness process is set forth in the Treasury guidance, although such list is not likely to be inclusive.

When to Apply

Small businesses and sole proprietorships can apply starting this Friday, April 3, 2020.
Independent contractors and self-employed individuals can apply starting next Friday, April 10, 2020.

Although the program is open until June 30, 2020, we encourage you to apply as quickly as possible since the funds are capped and lenders will need time to process your loan.

Application Process

A list of participating lenders can be found at www.sba.gov, and additional non-SBA lenders are likely to be authorized to participate in the coming weeks.

To apply, you will need to complete a Paycheck Protection Program loan application and provide your lender with additional documentation and certifications. A sample payroll loan application can be viewed here and we encourage interested prospective borrowers to begin discussions with lenders as soon as possible.

As noted above, we encourage borrowers to apply as soon as possible for the federal programs being offered. If you are in need of any assistance, including in determining which program may be right for you, JMBM is available to help.


Jeffer Mangels Butler & Mitchell LLP is a full-service law firm committed to providing clients with outstanding results. Our corporate lawyers serve numerous middle-market companies, large publicly traded corporations and emerging entrepreneurial businesses with a full range of financing, transactional and operational counsel, as well as in all aspects of mergers and acquisitions.