Colorado’s small businesses and nonprofits have been approved for $5.8 billion in potentially “forgivable” federal loans intended to help employers keep workers on the job during closures prompted by the new coronavirus.

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That’s about 2% of all loans approved by banks nationwide as of Monday, according to data from the U.S. Small Business Administration on Tuesday. Nationwide, more than 1 million loans have been approved for a total of about $247.5 billion as of Monday, according to the SBA.

Colorado’s share so far is split between 28,469 recipients from the state.

The approvals have all happened within the first 11 days of the Paycheck Protection Plan loan, a $349 billion federal program passed in late March. Loans are forgiven if 75% of the loaned amount is used to pay workers.

The paycheck loans created chaos on April 3, the first day businesses could apply and just one week after Congress passed the $2 trillion stimulus package. Small businesses were concerned that the $350 billion would run out.

MORE: 6 ways Congress’ $2 trillion aid package will help Coloradans weather coronavirus

And many banks, which received guidance on the process only the night before, weren’t ready. Many large banks only let existing customers apply. Guidance from the SBA continued to change last week.

“Yes, this week has been quite a ride,” Bruce Alexander, president and CEO of Vectra Bank, wrote in an email on Thursday. “This is an important program that so many small businesses need. Because of the way it was designed, it has created a sort of frenetic ‘land rush’ of customers wanting to get a loan before the program runs out of money.”

Vectra Bank opened up its application process on April 7, after spending several days to get its system prepared and to make sure it understood the federal guidance. Within a few hours, it had more than 20,000 applications. Vectra Bank has about 35 locations in Colorado.

“Hopefully Congress will provide additional funding,” Alexander wrote. “The process from SBA was also more difficult to navigate than what we were led to believe at first. We are working around the clock to process our application pipeline, focusing on customers first but we will also shortly process new prospective clients.”

MORE: Forgivable federal “paycheck” loans expand to self-employed after frustrating start for Colorado small businesses

The Colorado Sun has applied for a Payroll Protection Plan loan.

There are efforts underway in Congress to expand the funding amount, but so far proposals have not moved past the U.S. Senate.

More banks have been approved to offer the paycheck loans. And the SBA has set up a portal to find a local lender at sba.gov/paycheckprotection/find.

Paycheck Protection Program, the 7(a) loan To qualify, a small business, nonprofit, Tribal business or veterans organization with fewer than 500 employees (there are some exceptions) must have been operating on Feb. 15. The loan is available from local banks — not the SBA (search for an approved lender HERE). Borrow up to 2.5-times of one’s average monthly payroll costs — up to $10 million. Expect to provide proof of payroll costs for the past 12 months and be sure to track expenses after receiving the loan. Lenders will forgive 100% of loan if it’s used to cover an eight-week period by June 30 for expenses limited to: Payroll support, including paid sick or family leave, health care benefits

Employee salaries under $100,000

Mortgage payments

Rent

Utilities

Debt obligations incurred before the covered period If loan is used for other items: A lower percentage of the loan is forgiven

Interest rate capped at 1% for amounts not forgiven

Maximum 10-year term Applicants cannot receive other federal COVID-19 aid for the same purpose, such as paying staff wages or sick leave, between Feb. 15 and Dec. 31. But if the business owner already has an SBA emergency loan, it can be refinanced into the paycheck loan. Independent contractors, sole proprietors and the self-employed should talk to their local bank first and make sure they are an SBA-approved lender, or a 7(a) lender. Expect to be prepared to submit documentation of operating expenses, employment records or how payroll is calculated. Applicants fill out the same forms as larger businesses. To apply, check with your local bank. More details are posted on the SBA’s site. Read about the Paycheck program in the CARES Act.

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