Editor's Note: This article was changed to reflect corporate banking rules for local bankers.
GLEN ROCK, NJ - The business community learned about the Paycheck Protection Program loans through local bankers during a virtual meeting hosted by the Glen Rock Chamber of Commerce on Friday.
The Paycheck Protection Program (PPP), run through the Small Business Association, opened its application process Friday morning and said most banks will begin processing applications on Monday, April 6, according to one local banker.
The federal government announced the loan program in light of the coronavirus epidemic, which forced most of the country's workforce to stay home, starting a spiraling process of business closures and employee layoffs.
In order to apply for loans to keep employees on the payroll, businesses need to hand in 12 months of payroll records. Payroll records from January 1 through February 29, 2020, or eight weeks, are considered, plus another 25%, according to the banker.
The application period began on Friday morning for those who pay through W2s, and for those pay through 1099s, the application period begins 9 a.m. April 10.
"Apply as soon as you can," the banker said. "There is a pot of money and when it runs out, it runs out."
If business owners keep employees on the payroll or rehire them quickly, the loan will be forgiven.
The loan has a rate of 1% and a two-year payback. All loans are processed online.
"To give you an idea of the scope we're dealing with, we processed 9,000 SBA loans last year, but next week, we anticipate dealing with 100,000 applications," the banker said.
The loans are separate from the Economic Disaster Relief Loans run through FEMA. Businesses may apply for both but cannot use the funds for the same bills, such as payroll, utilities and mortgage payments, a local bank official said.