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CARES Act Announced

First Option Bank CARES About Your Business

If your business has been negatively impacted by COVID-19 and has fewer than 500 employees, is a non-profit, a tribal business or a veterans' association, you may be eligible for a loan through the recently announced CARES (Coronavirus Aid, Relief, and Economic Security) Act.  

First Option Bank will offer SBA 7(a) loans through the CARES Act. The overall intent of the new stimulus package loans is to help reinvigorate small businesses across the country and to help them to not lay off workers due to COVID-19 disruptions. One of the most important provisions to be aware of is the small business Paycheck Protection Program. Within the CARES Act, the Paycheck Protection Program sets aside $350 billion in government-backed loans and is modeled after the existing SBA 7(a) loan program. 

Current details on the CARES Act small business Paycheck Protection Program loans include: 

  • Businesses negatively impacted by COVID-19 with fewer than 500 employees, non-profit businesses, tribal businesses or veterans’ associations are eligible to apply. 

  • Self-employed, sole proprietors, freelance and gig economy workers are also eligible to apply. 

  • The business must be operational as of Feb. 15, 2020 and had employees for whom it paid salaries and payroll taxes, or a paid independent contractor. 

  • Loan amounts will be up to $10 million, determined by a formula, tied to payroll costs incurred by the business, i.e. 2.5X monthly eligible payroll expenses. 

  • The maximum loan amount under the Paycheck Protection Act is $10 million. 

  • Loan recipients may be eligible for loan forgiveness, and any loan amount that is not forgiven by June 30, 2020, will amortize over 10 years. 

  • The loan is unsecured with no personal guarantee required. 

  • Businesses can use multiple SBA programs if the use of proceeds is not duplicated. 

First Option Bank will continue to share details as they become available. 

As we work with government agencies to implement the CARES Act, you may receive guidance from well-intended sources. Please keep in mind the guidance, including full requirements, have not yet been issued. We anticipate that guidance soon and will provide it as soon as we possibly can. 

In addition to well-intended sources, there are still those who are looking to take advantage of individuals and businesses, during this time. Please continue to be wary of scams and take all necessary precautions against them. A good rule of thumb is to only deal with financial institutions and individuals you are familiar with. 

If you are concerned about your business finances and would like to discuss your unique situation and the options available to you, please contact your loan officer or call (913)557-0800. 

First Option Bank welcomes the opportunity to serve you through this challenging time. 

We will get through this together. 

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