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Loan Program Eligibility

Any business concern (including franchises) as well as non-for-profit organizations, with no more than 500 employees are eligible to receive a single loan under this Act. The maximum amount of the loan is the lesser of (1) $10M, and (2) 2.5 times the monthly payroll costs determined over a specific testing period.

Loan Proceeds Usage

Loan proceeds can be used for payroll and other compensation costs, health benefits, insurance premiums, mortgage interest, rent, utilities and interest on other outstanding debt.

Loan Forgiveness

Perhaps the most important element of the Loan Program is its loan forgiveness element.

Forgiveness Penalties

Given the intent of the Act to save American jobs and salaries, the amount of the foregoing loan forgiveness will be reduced by certain factors. These factors include a reduction in the average number of full-time employees as well as substantially reduction (beyond 25%) in employees’ salaries.

Other Terms

The maximum loan term under the Act will be 10 years (for amounts that were borrowed that are not subject to loan forgiveness), and the maximum interest rate is 4%. The first payment on any loan under this Act will be for at least six (6) months, but not longer than a year.

How to Apply

Eligible business should seek competent counsel immediately to work on the application, as the loans will begin to be available likely by the middle of April 2020.

Veteran Entrepreneur Town Hall

In response to the COVID-19 pandemic, the PenFed Veteran Entrepreneur Investment Program (VEIP) has taken preventive measures to ensure the safety of others. Effective immediately, our Master’s Program will be rescheduled until the fall and our Pop-Up labs will be conducted virtually.