On Friday, April 3, 2020, small businesses and sole proprietorships can apply for loans under the Coronavirus Aid, Relief, and Economic Security Act’s (CARES) Paycheck Protection Program (PPP). We wanted to share the following information with you —as well as helpful links— to understand how this can influence your business.
- Beginning Friday, April 3, 2020, both small business and sole proprietorships can apply for loans under the PPP through existing Small Business Administration (SBA) lenders. On Friday, April 10, 2020, independent contractors and self-employed individuals will be able to apply for the PPP loans through SBA lenders as well.
- The CARES Act was signed into law on Friday, March 27, allocating $2 trillion in federal relief funding for individuals and small businesses hurt by COVID-19.
- The PPP is a forgivable loan. This means if you are able to maintain the parameters of PPP it (essentially) turns into a grant. 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.
- The PPP will cap at $349 billion. You should apply as soon as possible, as applications will be reviewed in the order they are received.
- The program is designed to help small businesses keep their workers employed by providing financial support to payroll and select other expenses through June 30, 2020.
How to qualify for the Paycheck Protection Program:
According to the U.S. Department of Treasury, “Small businesses with 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors— are eligible. Businesses with more than 500 employees are eligible in certain industries.”
Take action now:
The initial PPP information encourages businesses, like yours, to apply as quickly as possible. There are concerns that high demand will cause the PPP to quickly reach its funding cap of $349 billion.
- From the U.S. Department of Treasury: https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses
- Link to application: https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
- Become.co: https://www.become.co/cares-act/paycheck-protection-program/
If you need more assistance during this time, please contact us directly. We are happy to help.