How much does it cost to apply for a Paycheck Protection Program loan?
April 15, 2020
In this 2-minute read:
- Does it cost anything to apply for SBA/PPP loans?
- Do I need to put up collateral for a Paycheck Protection Program loan?
- What is the interest rate for a PPP loan?
- What are the terms of a PPP loan?
Under the CARES Act, $2 trillion has been allocated to help with relief efforts of individuals and businesses to help mitigate the financial impacts of the COVID-19 pandemic. Business owners and independent contractors are able to apply for loans through the Paycheck Protection Program (PPP) to help them through the next 8 weeks following the receipt of their funding.
Womply is acting as a facilitator to connect American small businesses to SBA-authorized lenders to get emergency loans for COVID-19 relief. Start your free application here, or call us at 855-208-8813 for a free consultation.
What does it cost to apply for PPP loans?
You should not be charged for applying for PPP loan. Applying for SBA loans is free. SBA-approved lenders and loan facilitators/agents receive their compensation from the SBA, not from borrowers. If you are asked to pay for assistance applying or any fees for the loan itself, you should seek another lender or agent.
Find a trusted lender or loan agent who will be honest with you about the application process and how you will get your loan.
Do I need any collateral for Paycheck Protection Program loans?
No collateral is required for PPP loans, nor is there a personal guarantee. You should not be asked to put up any collateral for your loan. If you are asked to do so, we urge you to seek out a reputable SBA-approved lender.
What is the interest rate for PPP loans?
You will have a fixed 1.00% interest rate for the duration of your loan. This will not vary by lender because this program is sponsored by the federal government. If you are told that your interest rate will be different from this, find another lender or trusted agent to help you with your loans.
What are the terms of PPP loans? Does it differ among lenders?
The terms of your PPP loan will be the same no matter which lender you apply through because this is a federally backed emergency relief program. All businesses will receive the same terms on their loans.
The terms of these PPP loans are as follows:
- PPP loans can be forgiven as long as they are used to cover payroll costs, mortgage, rent, and utilities AND employee and compensation levels are maintained
- Payroll costs are capped at $100,000 on an annualized basis for each employee
- Loan payments will be deferred for six months (though interest will still accrue during that time)
- Loans can be received for the amount of two months of your average payroll costs from the last year, plus an additional 25% (this is capped at $10 million)
- Loans are due in two years
Please note: For more information about loan forgiveness, please read Do I have to pay back my PPP loan? Here’s how to get your loan forgiven.
Click to read our article about calculating your average payroll costs and loan request amount
Here’s a quick list of helpful links:
- Start your PPP Application: HERE
- Read our full list of PPP application FAQs: HERE
- Avoid common application mistakes: HERE
- If you made a mistake on your PPP, submit a new application: HERE
- Running status updates for PPP applications: HERE
- View Womply’s recorded webinar: HERE
- See Womply’s webinar slides: HERE
Need help applying for your PPP loan?
Womply is a a verified loan agent working with SBA-approved lenders and can help match you up with an eligible and honest organization to process your application. Call us at 855-208-8813 for a free consultation or click here to start your free application now.
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