Texas gov. Greg Abbott announced a new initiative Monday, making $50 million in loans available to Texas small businesses to help stay afloat through the coronavirus crisis.
Abbott was joined by Janie Barrera, President and CEO of LiftFund, and John Waldron, President and COO of Goldman Sachs, and a few small business owners to make the announcement.
During the news conference, Abbott announced that Goldman Sachs, LiftFund and other community-developed financial institutions would be partnering to give $50 million in loans to small businesses affected by COVID-19.
Here is what business owners need to know:
What is the loan?
The loan is part of the Goldman Sachs “10,000 Small Businesses” program. The loan is made through the U.S. Small Business Administration’s Paycheck Protection Program.
What can I use the loan for?
The loans will mostly be used for businesses to continue paying employees.
However, according to the website, the loans can also be used to cover healthcare costs, mortgage interest payments, utilities, rent and interest on other debt obligations incurred before Feb. 15.
Will the loan be forgiven?
According to Waldron, the loan is designed to be forgiven if certain criteria are met.
Some of the criteria taken into account is how much was spent on something other than payroll and if employees have been laid off.
You can read more about the loan requirements here.
How do they calculate how much I will get?
According to the website, “PPP loans are calculated based on 2.5 times your business’s (or organization’s) monthly payroll costs.”
These costs include compensation, retirement payments, state and local taxes on payroll, vacation payment or paid leave, group healthcare costs and allowances for separation and dismissal.
What do I need to submit with the application?
Each applicant must provide the following, according to the website:
- Utility bill of home/business location
- EIN letter if applicable
- Business entity documents:
- Articles of formation/incorporation
- Operating agreement
- Assumed Business Name Certificate
Documentation for Payroll and Expenses:
- IRS Form 941 Employer’s Quarterly Federal Tax Returns for 2019 (March, June, Sept, Dec) and Q1 2020 if available
- Form 940 for 2019 Employers Annual Federal Unemployment (FUTA) Tax Return
- Payroll ledgers reflecting each employee compensation for the following periods: Each month including January 19 to February 2020 (14 months total)
How do I apply?
To apply for the loan, you can visit Liftfund.com/sba-paycheck-protection-program-ppp-loan-resource-page/.
For more information, you can visit Liftfund.com.
*A version of this story originally appeared on Click2Houston.com.