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April 7 2020 Market Update

By on Apr 07 in Economics, Finance, Financial advisors, Market Update, Worth sharing

The SBA’s Relief Program for Small Businesses: What You Need to Know

Many of our clients or their family members are small business owners, and as part of the CARES Act passed recently, the Small Business Administration has created the $350 billion Paycheck Protection Program (PPP).

As of Friday, April 3, only four of the largest 10 lenders in the US were accepting applications for the program,[1] with about $30 billion worth of loans across 100,000 businesses approved as of Monday, April 6.[2] In other words, the start has been rocky, and as of this writing a number of banks were still in the process of setting up their lending programs.

That said, the PPP could provide a useful source of liquidity and support to small businesses. Read more for some basic information about the program and additional resources small business owners can turn to during this challenging climate.

PPP Basics

This loan program is available to businesses with 500 or fewer employees to help with payroll, rent, utilities, healthcare costs, and more. The goal is to help make it easier to hold onto current employees or bring back those who have been laid off or furloughed.

Loans provided under the program are fully forgivable when used for the following over the 8-week period following loan disbursement:

• Payroll costs
• Mortgage interest
• Rent
• Utilities

Payroll costs are capped at $100,000 per employee on an annualized basis.  With high anticipated subscription, it is anticipated that businesses won’t be able to use more than 25 percent of the loan amount for non-payroll costs.

Loan payments will be deferred for six months, and loans do not require any collateral or personal guarantees – nor will any fees be charged.

Payroll Requirements  

One important note is that forgiveness is based on keeping or rehiring employees: if full-time headcount declines or if salaries/wages decrease, forgiveness will be reduced.


Businesses with fewer than 500 employees are eligible, while those with over 500 are still eligible if they’re in certain industries.

• Qualifying businesses include:
• Non-profits
• Veterans’ organizations
• Tribal concerns
• Self-employed individuals
• Sole proprietorships
• Independent contractors

How to Apply

You can apply via any SBA 7(a) lender or via any participating federally insured bank, credit union, or Farm Credit System institution.

In practice, however, many banks are only accepting applications from existing customers,[3] and Wells Fargo announced on Monday April 6 that its lending capacity had already been reached.[4] 

Contact Us for Support

While we can’t provide any direct lending support, we are on hand to provide advice and guidance in navigating this process. Please contact us today if we can lend a hand as you research your options.

More Resources for Business Owners

More information on the PPP and other funding programs for small businesses

Additional guidance from the SBA on getting through the coronavirus crisis

Information from the California Employment Development Department


Securities are offered through MidAtlantic Capital Corporation (“MACC”) a registered broker dealer, Member FINRA/SIPC.

Investment advice is offered through JSF Financial, LLC, which is not a subsidiary or control affiliate of MACC.

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[1] https://www.cbsnews.com/news/paycheck-protection-program-lenders-borrowers-roll-out-cares-act/

[2] https://www.cbsnews.com/news/paycheck-protection-program-wells-fargo-small-business/

[3] https://www.cbsnews.com/news/paycheck-protection-program-lenders-borrowers-roll-out-cares-act/

[4] https://www.cbsnews.com/news/paycheck-protection-program-wells-fargo-small-business/

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