Paycheck Protection Program
The President’s administration rolled out the long awaited answer to keeping businesses open during the Coronavirus pandemic. The answer came in the way of the Paycheck Protection Program.
The PPP is meant to be a way to cover the costs of employers keeping on the employees whom they were forced to let go as a result of mandatory business shutdowns. These employers were forced to make the hard decision of whether to keep their businesses or likely loose their employees over the longterm.
The President’s advisors came together with a plan that enables employers to furlough their employees with a government-backed loan up to $10M or $100,000 per employee, rent or mortgage payments and in many cases a grant if the loan is used to re-hire their employees.
Here is more data taken directly from the government website.
The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to
small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the
same for everyone.
The loan amounts will be forgiven as long as:
The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and
utility costs over the 8 week period after the loan is made; and
Employee and compensation levels are maintained.
Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely
high subscription, it is anticipated that not more than 25% of the forgiven amount may be for
Loan payments will be deferred for 6 months.
When can I apply?
Starting April 3, 2020, small businesses and sole proprietorships can apply for and
receive loans to cover their payroll and other certain expenses through existing SBA
Starting April 10, 2020, independent contractors and self-employed individuals can
apply for and receive loans to cover their payroll and other certain expenses through
existing SBA lenders.
Other regulated lenders will be available to make these loans as soon as they are
approved and enrolled in the program.
Where can I apply? You can apply through any existing SBA lender or through any federally
insured depository institution, federally insured credit union, and Farm Credit System institution
that is participating. Other regulated lenders will be available to make these loans once they are
approved and enrolled in the program. You should consult with your local lender as to whether it
is participating. Visit www.sba.gov for a list of SBA lenders.
For more information here is a link to the Treasury.gov website. click Here