With the Paycheck Protection Program (PPP) in place, many have questions about how it will work and who it will cover. The program allows up to $349 billion in forgivable loans to small businesses, allowing them to pay their employees during the coronavirus crisis. Each business can only apply for one, and it must be used to cover payroll costs, mortgage interest, rent, and utilities payments for 8 weeks following the reception of the loan. The loan comes with an interest rate of 1% and will be due two years after you receive the loan, according to the US Department of Treasury.
When can I apply?
- Small businesses and sole proprietorships can apply for PPP starting on April 3.
- Independent contractors and self-employed people can apply startgin on April 10.
- Other regulated lenders will be available to make loans as soon as they are approved and enrolled in the program.
Where can I apply?
- Applications are accepted through any existing SBA lender or through any participating federally insured depository institution, federally insured credit union, and Farm Credit System Institution. You can visit www.sba.gov for a list of SBA lenders.
Who can apply?
- All businesses with 500 or fewer employees can apply.
What do I need to apply?
- Participants will need to complete an application for the Paycheck Protection Program. You will likely need to provide your lender with payroll documentation.
How much of my loan will be forgiven?
- You will owe money when your loan is due if the money was used for anything other than payroll costs, mortgage interest, rent, or utilities payments. You will also owe money if you change your staff and payroll.
What do I need to certify?
- The funds will be used to retain workers and make payments per the guidelines listed above.
- You will not receive another loan under this program.
- You will provide information regarding the number of full-time employees on payroll and the payroll costs.
- You don't make any false statements.
- The lender will calculate the loan amount you're eligible for based on tax documents you submit.
