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【US Tax】Paycheck Protection Program Loan

On Friday, March 27, 2020, the President Donald Trump signed into law the CARES Act, which contains $349 billion in relief for Paycheck Protection Program. But $349 billion was totally depleted.

Then President Donald Trump signed the fourth $484 billion coronavirus relief package into law on Friday, Apr 22, 2020, which contains $310 billion in new funds for the Paycheck Protection Program.

The Small Business Administration (SBA) resumes accepting Paycheck Protection Program applications from participating lenders on Monday, April 27, 2020 at 10:30am EDT.

The loan will be fully forgiven if the funds 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). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

This loan has a maturity of 2 years and an interest rate of 1%.