WORTHINGTON — A Worthington banker is encouraging small businesses in the community to utilize federal funds made available through last month’s passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act.

One component of CARES is the Paycheck Protection Program, which authorizes up to $349 billion in forgivable loans to small businesses so they may continue to pay their employees during the COVID-19 pandemic. The program stipulates all loan terms are the same for everyone.

“This program is critical to our community and I don’t think a lot of people understand the impact this can have on Nobles County and our community,” First State Bank Southwest CEO Greg Raymo said Friday morning. “We really need to bring capital back into our community to help the economy recover, and the message is that businesses here should apply for this money.”

Raymo noted that all businesses — including nonprofits, veterans organizations, tribal business concerns, sole proprietorships, self-employed individuals and independent contractors — with 500 or fewer employees can apply.

“Some people think it’s just open for small business. .. but it’s also open to farmers,” Raymo added. “It’s for any business with less than 500 employees and having an active payroll as of Feb. 15, 2020.”

The program allows for the borrowing of up to $10 million, with loans available for up to two months of average monthly payroll costs from the last year plus an additional 25% of that amount.

Raymo explained that 75% of the loan money for each applicant has to be spent on payroll, with the remaining 25% assisting with other expenses such as rent and utilities payments, health insurance and mortgage interest.

Applications may be completed through any existing Small Business Administration lender or any federally insured depository institution, federally insured credit union and Farm Credit System that is participating. Individuals should consult with their local lender as to whether it is participating.

Raymo said the first six months of Paycheck Protection Program payments are deferred and, after eight weeks, a small business owner can apply for forgiveness — meaning “they never have to make a payment.”

Business owners are strongly encouraged to participate in the program, no matter how healthy they may be right now.

“The thing I hear from businesses often is … it really hasn’t affected me much,” Raymo said of the current pandemic. “But we don’t know how long this is going to be. They may not have felt much pain yet, but it could be felt in the future.

“There are many people who aren’t working or getting a paycheck,” he added. “That means money is not being circulated in the same way in the community. ... Business owners should get into their financial institution and apply for this to get money circulating once again.”

While the application deadline is June 30, Raymo encouraged participation in the program as soon as possible. He also noted there are currently discussions underway to add billions more in funding for the Payment Protection Program, though there are differences between Democrats and Republicans on how that money would be distributed.

In the meantime, Raymo stressed, there’s no need to wait — small business owners should simply do what’s necessary to apply.

“For the sake of our economy, I think it’s critical,” he said. “The community needs to understand the economic impact of this.”