Treasury, SBA provide information on new small-business loan program

The Treasury Department and Small Business Administration (SBA) said Tuesday that they have launched an effort to mobilize banks and other lenders to distribute small-business loans authorized by the coronavirus relief law President Trump signed last week.

The coronavirus relief package created a nearly $350 billion program under which businesses with 500 or fewer employees can receive loans of up to $10 million. The loans will be forgiven if businesses use the funds to cover payroll costs and other operating expenses in the eight weeks following loan origination.

Treasury and the SBA both have launched webpages with information about the program. The SBA’s webpage includes a link to the application form for borrowers and fact sheets about the program for both lenders and borrowers.

Tuesday’s announcement comes after Mnuchin said Monday that he hoped documents about the program would become available that day. Mnuchin reiterated on Tuesday that he expects businesses to be able to start to apply for and receive loans on Friday.

“This legislation provides small business job retention loans to provide eight weeks of payroll and certain overhead to keep workers employed,” Mnuchin said in a statement. “Treasury and the Small Business Administration expect to have this program up and running by April 3rd so that businesses can go to a participating SBA 7(a) lender, bank, or credit union, apply for a loan, and be approved on the same day.”

Treasury’s fact sheet for borrowers states that small businesses and sole proprietorships will be able to start applying for loans on Friday through existing SBA lenders, and self-employed people and independent contractors will be able to start applying for loans through existing SBA lenders on April 10. Other lenders will be able to start to make loans through the program once they are approved.

“This unprecedented public-private partnership is going to assist small businesses with accessing capital quickly,” SBA Administrator Jovita Carranza said. “Our goal is to position lenders as the single point-of-contact for small businesses – the application, loan processing, and disbursement of funds will all be administered at the community level.”

The small-business loan program is one of several aspects of the new coronavirus relief law that Treasury has been providing information about in recent days. Other areas of the package that Treasury has been working to implement include direct payments to individuals, a new tax credit designed to encourage businesses to retain their workers and aid to the airline industry.

Updated at 3:17 p.m.