SBA 7(a) Standard Loans

With this program, rates will fall between Prime + 2.7% to 3.7% and terms can go out as far as 25 years.

The current Prime rate is 3.25%

No, SBA Standard 7(a) loans are not currently eligible for loan forgiveness.  Only the 7(a) Relief loans are eligible for forgiveness at this time.

A major reason for the proposed Paycheck Protection Program is to help as many business as possible keep as many individuals employed as possible, so qualifying for principal forgiveness is heavily based on staff and pay rate retention, though there are other conditions that also apply:

1. Funds received through this program must be spent on payroll, debt, and mortgage/rent expenses. It is anticipated that not more than 25% of the forgiven amount may be used for non-payroll costs.
2. To be eligible for full forgiveness, employee count cannot be reduced (as compared to the previous year)
3. To receive full forgiveness, you cannot have a reduction in any employee’s pay that goes beyond 25 percent of the prior year’s compensation (reduction in salaries over $100,000 are not considered in this calculation)
4. Full forgiveness can be achieved if you re-hire employees furloughed or laid off at any point between 2/15/2020 and 4/26/2020, so long as they are rehired by June 30, 2020.
5. Forgiveness is conditional on your employee count not being reduced over the next year.

If you don’t meet the full employment requirements, you are still eligible for partial loan forgiveness.  However, the amount forgiven will be proportionately reduced based on the number of employees you were unable to retain or rehire.