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Emergency Relief SBA Loans

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UMassFive is proud that we are an approved Small Business Administration (SBA) lender for the Paycheck Protection Program (PPP), a key component of the recently enacted CARES Act.

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Please email our Commercial Services Division for additional information, and reference the resources below.

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As a part of the CARES Act of 2020, the Paycheck Protection Program (PPP) provides loans to small businesses (under 500 employees) that are designed to offer a direct incentive to keep their workers on the payroll. See below for the answers to common questions.


Jump to:

What is my Maximum PPP Loan Amount?
How Can I Use a PPP Loan?
What is the Interest Rate and Term On My Application?
When Does Repayment Begin?
Can My PPP Loan Be Forgiven?
What If I'm not a Member of UMassFive?
Additional Resources


WHAT IS MY MAXIMUM PPP LOAN AMOUNT?

Small business loan applicants are generally eligible to borrow up to a maximum amount that is calculated using a formula that takes the average monthly payroll costs for the most recent 12 month period (calendar year 2019 can also be used) and then multiplies that amount by 2.5.

Payroll costs over 12 months include the following:

  • Salary and wages up to a maximum of $100,000 per employee.
  • Payments made for vacation, parental, family, medical, or sick leave.
  • Payments made for employee benefits such as group health care coverage, employer paid retirement plan contributions, employer paid state and local taxes, and certain other less common costs as outlined in the CARES Act.

HOW CAN I USE A PPP LOAN?

The PPP loan proceeds must be used for the items identified below during the 8 weeks following the date of the loan

  • Payroll and benefit costs as defined above
  • Rent or lease payments
  • Utility payments
  • Mortgage interest payments
  • Other less common items as outlined in the CARES Act

WHAT IS THE INTEREST RATE AND TERM ON MY PPP LOAN?

The interest rate will be one percent (1.00%). The term of the loan is two years.

WHEN DOES REPAYMENT BEGIN?

Loan payments will be deferred for the first six months following the date of the loan. However, interest will continue to accrue on PPP loans during this six month deferment.

CAN MY PPP LOAN BE FORGIVEN?

Any portion of the loan that is used for payroll costs, or to pay for utilities, rent, mortgage interest, and other qualified purposes, may be forgiven if workers remain employed through the end of June 2020 and payroll costs represent at least 75% of the total amount forgiven. The total amount of loan forgiveness can be up to the full principal amount of the loan plus any accrued interest.

  • The actual amount of loan forgiveness will primarily depend on the amount of the loan used for covered expenses over the eight-week period following the date of the loan. However, not more than 25% of the loan forgiveness amount may be used for covered non-payroll costs.
  • Special note for Borrowers who have already reduced staff.
    • Because the loan amount is calculated using the past 12 months payroll costs, and because some businesses have been forced to furlough or lay off employees in the past several months due to COVID19, there is an exemption that allows the loan forgiveness amount to not be reduced as long as employees are re-hired by June 30, 2020.
    • Specifically, loan forgiveness will not be reduced for employee reductions that happened between February 15 and April 26 2020, as long as those employees are rehired by June 30, 2020.

WHAT IF I’M NOT A MEMBER OF UMASSFIVE?

Please email us to establish your business membership. We'll have a member of our team reach out to you directly to collect the information we'll need to process your UMassFive business membership, and then your PPP loan application.