PORTLAND, Maine — Small businesses in Maine reeling from huge losses during the coronavirus pandemic can now officially apply for a new forgivable loan to help keep their business afloat.
Loan applications for the 'paycheck protection program' went online at midnight Friday. It's part of a nearly $350 billion federal government relief program approved by Congress a week ago. But the process got off to a rough start because banks only received 31 pages of final guidance Thursday night.
The Maine Bankers Association represents 30 different banks throughout the state. Officials say it will take time before the program is fully functioning. Lenders also have a lot of questions for the Small Business Administration (SBA) on how to process the applications.
Paperwork for the loans is available through the SBA website. Businesses with up to 500 employees can apply and need to work with a participating SBA lender, bank, or credit union.
All loan payments will be deferred for six months, but the SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used to pay for wages, rent mortgage interest or utilities.
Companies can borrow up to two and a half times their monthly payroll. The association says members are seeing a tremendous volume in applications for loans from businesses, which could help them recover and possibly reopen in the future.
The demand at this point is extraordinary and trying to figure out the process that could deliver the results congress wants will be the challenge', said Chris Pinkham, the President of the Maine Bankers Association.
Businesses must show lenders proof that their company was in operation on Feb. 15, 2020, and that you had employees for whom you paid salaries and payroll taxes.
In addition, you'll need to show proof of your average monthly payroll costs in 2019 (or for the first two months this year if your business is new).
Independent contractors and the self-employed, who must wait until April 10 to apply, need to show proof of "payroll and other certain expenses" according to Treasury.
At NEWS CENTER Maine, we’re focusing our news coverage on the facts and not the fear around the illness. To see our full coverage, visit our coronavirus section, here: /coronavirus
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