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How Y-K Delta Small Businesses Can Get A Slice Of The $2.2 Trillion CARES Act

The Paycheck Protection Program and the Economic Injury Disaster Loan are two forgivable loans available to businesses affected by the COVID-19 pandemic.
Small Business Administration

Small businesses in the Y-K Delta that are struggling financially during the COVID-19 pandemic should apply for forgivable loans paid for by the $2.2 trillion CARES Act. It may be confusing how much money is available, how you can apply, and when you would receive those funds. 

What is the Paycheck Protection Program?

The $2.2 trillion CARES Act, signed by the federal government, allocates $349 billion for the Paycheck Protection Program. Small businesses with fewer than 500 employees are eligible, along with independent contractors, sole proprietors, and religious organizations, according to Small Business Administration Regional Administrator Jeremy Field.

Field says that the Paycheck Protection Program, or PPP, can be a forgivable loan for small businesses affected by the COVID-19 pandemic. The loan essentially turns into a grant if terms are met.

"Congress and the White House wanted you to be able to give a paycheck to your people so they can stay home, and be able to pay their rents and mortgages, and buy some groceries, and just be healthy and safe for the eight weeks that it covers," Field said.

What are the terms? How much money can I get and how do I get my loan forgiven?

Field says that your loan will be forgiven if you pay your workers for eight weeks after you receive the loan. The forgivable amount is calculated by taking your payroll from the last year, getting your average monthly payroll, and multiplying that by 2.5. For example, if you pay your workers $10,000 a month, your forgivable loan amount will be $25,000. 

But to get the loan completely forgiven, you must hire back all the workers you had before the COVID-19 pandemic and keep them on staff for eight weeks after you receive your loan. Field says that you can use up to 25 percent of the loan for rent, mortgage, or utilities, and the loan will still be forgiven. Field says you also have the option not to hire everyone back.

“The fraction of people you don't hire back will also be a fraction that you will not have forgiveness for the loan,” Field said.

If you don’t follow the terms for the loan forgiveness, you will have two years to pay it back at a 1 percent interest rate.

How do I apply?

To apply for the loan, you will need to go to your local bank and bring at least your payroll report and IRS tax forms from last year. Field says that you should check with your bank before you go, because some require additional documents.

How long does it take to receive funds?

Chad Steadman, Senior Lending Director at First National Bank Alaska, says that once his bank verifies that the payroll you provided is correct, the application is submitted to the Small Business Administration.

“We’ve seen those guarantees turned around very quickly,” Steadman said. “Sometimes in minutes, sometimes in hours.”

Steadman says that once the SBA authorizes the loan, the funds will be dispersed in less than 10 days. It could even be as fast as one to two days.

“We want to get the money as fast out to people as we possibly can. That also being said, there is a significant interest in this program,” Steadman said.

When do I need to apply by?

Field says that the SBA has already processed $100 billion of the $349 billion available. He says that the U.S. Congress may add more to the pot, but he advises businesses to act fast.

“It doesn't seem likely that those funds will last till June 30,” Fields said.

June 30 is the official deadline to apply for the Paycheck Protection Program. Like any government program, there are caveats. For complete information, both Field and Steadman say to contact your local bank.

Another forgivable loan: Economic Injury Disaster Loan

There is one other source of financial assistance for business owners, the Small Business Administration’s Economic Injury Disaster Loan, or EIDL. 

“If your issue is about payroll, and mortgage, and keeping the lights on, it’s the Paycheck Protection Program, if you need money for something else, that’s when you apply for an EIDL loan,” Field explained.

One example Field provided is if you’re a restaurant and you have perishable goods that you can no longer sell. 

He says that the EIDL loan will offer an advance of $1,000 per employee up to 10 employees, which you don’t have to pay back. You can request more money for your EIDL loan, which you will need to pay back at a 3.75 percent interest rate for small businesses and 2.75 percent for nonprofits.

For the EIDL loan, you will apply directly with the Small Business Administration on their website


Greg Kim is a news reporter for KYUK covering environment, health, education, public safety, culture and subsistence. He's covered everything from Newtok's relocation due to climate change-fueled erosion to the Bethel chicken massacre of 2020.