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Blog - Published on April 03, 2020

A Message from Yapstone on the Paycheck Protection Program

A Message from Yapstone on the Paycheck Protection Program

Nearly every small business in the US is being impacted by the COVID-19 crisis. Due to the stay at home orders across the globe and their impact on travel, vacation rental property managers and property owners are suffering severe economic effects. Across the industry, reservations are being cancelled and refunded and employees are being furloughed or laid off. Fortunately, the US Government recently enacted several aid packages to help those impacted by the crisis. These programs include the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Economic Injury Disaster Loan Program (EIDL Program) and the Families First Coronavirus Response Act (Families First). One ofthe most impactful programs that may aid vacation rental property owners and managers is a section within the CARES Act called the Paycheck Protection Program.

The Paycheck Protection Program is a $349 billion loan program designed to assist small businesses with retaining their employees and paying mortgage interest, rent and utilities. This can aid businesses in the vacation rental industry keep their employees and cover certain overhead expenses.

Program Highlights:

  1. Loans can be fully forgiven when used for payroll costs, interest on mortgages, rent and utilities and when employee and compensation levels are maintained
  2. Loan payments can be deferred for six months
  3. Loan amounts up to $10M
  4. No collateral or personal guarantees are required
  5. No fees will be charged by the government or lenders
  6. Payroll costs are capped at $100,000 on an annualized basis for each employee
  7. Fixed interest rate of 0.50% and maturity of two years


Who is Eligible?

All businesses with 500 or fewer employees, including self-employed individuals, sole proprietorships, and independent contractors, are eligible. Some businesses in certain industries may be eligible even with more than 500 employees.

How Do You Apply?

Small businesses and sole proprietorships can apply starting on April 3rd, and independent contractors and self-employed individuals can apply starting on April 10th. Applications can be done through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, or Farm Credit Institution that is participating in the program. Small businesses should apply as quickly as possible because there is a funding cap. A list of participating lenders as well as additional information and full terms can be found at www.sba.gov. See more about the loan on the attached fact sheet.

Sincerely,

Your Partners at Yapstone


Download the Paycheck Protection Program Fact Sheet.

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