The Paycheck Protection Program
Congress is extending the deadline for applying to the SBA for a PPP loan until August 8. Means that a business application needs to be initiated several days in advance to be approved for submission to the SBA.
Congress has also extended the time for spending the PPP funds from 8 weeks to 24 weeks and lowered the threshold for the amount that must be spent on payroll from 75% to 60%. This means that almost all loan recipients will be able to spend the loan proceeds in a manner that will allow full forgiveness of the loan.
What is the Paycheck Protection Program?
The Paycheck Protection Program (PPP) is a U.S. Small Business Administration (SBA) federal loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
Who can apply?
This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organizations, and 501(c)(19) veterans organizations affected by coronavirus/COVID-19. Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries. Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.
Will I have to pay back this loan?
The loan may be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities and you have not reduced your payroll by more than defined amount. Please note: At least 60% of the forgiven amount must have been used for payroll.
The purpose of this loan/forgiveness is to enable and encourage small businesses to protect their employees. Loan payments will be deferred for six months, and no collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
How do I apply?
Click below to go to our application page to see what documents you need and get started on your application!