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Mnuchin Announces Changes to PPP; Rollout Set

Media Center:Mnuchin Announces Changes to PPP; Rollout Set

Last Updated: 4/6/2020 2:59 PM

Mnuchin Announces Changes to PPP; Rollout Set

The U.S. Small Business Administration’s Paycheck Protection Program, created through the CARES Act to provide relief to small businesses impacted by the novel coronavirus (COVID-19), launches Friday, April 3. In a press conference Thursday, Secretary of the Treasury Steve Mnuchin reported that the Treasury increased the .5% interest rate to 1%. He indicated that Treasury heard  the concerns of banks, listened and responded. He also reported that the Federal Reserve is working on its Main Street Business Lending program but did not provide more detail. When asked about the fact that guidance is not yet out for the banks to review, Mnuchin indicated the Treasury is working closely with the banking industry and are making changes based on concerns. As a result, the guidance will be available on their website soon.

All banks will have delegated authority to make these loans, but only SBA-certified lenders will be able to process the loans. Banks that have not yet been certified with the SBA can contact to apply for certification.

Following are resources that can provide more information on the Paycheck Protection Program loans:

The program will provide up to $350 billion in fully forgivable loans to help small businesses maintain payrolls during the coronavirus pandemic. The loans are fully guaranteed by the Small Business Administration, but the SBA will waive all SBA guaranty fees. PPP loans will be fully forgiven when used for payroll costs, interest on mortgages, rent and utilities, with at least three-quarters of the forgiven amount being used for payroll. Forgiveness is based on employers maintaining headcount or quickly rehiring and maintaining salary levels.

IBA President and CEO John Sorensen discussed the program with SBA Regional Administrator Thomas Salisbury in this week’s COVID-19 Update podcast. Listen to the podcast to learn more about the program.

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