PPP is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was recently signed by President Trump. The loan is designed as an incentive to keep your workers on the payroll.
Your company is eligible to apply if harmed by COVID-19 between February 15, 2020 - June 30, 2020 and you have fewer than 500 employees. PPP will be available through June 30, 2020.
You can apply though an existing SBA 7(a) lender. Lenders may begin accepting loan applications as early as April 3, 2020. A sample loan application is available on the SBA website.
For your company, you are eligible for up to 250% of your average monthly operating costs. Operating costs include payroll costs, medical insurance premiums paid by the company, rent, and utilities. The average monthly operating cost is determined over a 4 month period between March – June 2019. For example, let’s say that that your company's average monthly operating cost is $10,000. If you multiply $10,000 x 2.5, you’ll come up with a $25,000 PPP loan amount.
It's my understanding that up to 80% of the loan can be forgiven if employees are retained at full pay through June 30, 2020. The loan forgiveness will not be included in your company’s income. Paperwork will need to be submitted in order to substantiate the loan forgiveness.
As it relates to the portion of the loan that’s not forgiven, your company will not pay more than 4% annual interest.
There are no SBA loan fees and your first payment can be deferred for 6 months or more. There are no early payment penalties if you decide to pay off the loan early.
Your SBA lender should be able to address your questions regarding this loan program.
In closing, the PPP details outlined above are subject to change until the SBA finalizes the program. Here's a link to the SBA website if you're interested in finding out more details: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources#section-header-0
Your company is eligible to apply if harmed by COVID-19 between February 15, 2020 - June 30, 2020 and you have fewer than 500 employees. PPP will be available through June 30, 2020.
You can apply though an existing SBA 7(a) lender. Lenders may begin accepting loan applications as early as April 3, 2020. A sample loan application is available on the SBA website.
For your company, you are eligible for up to 250% of your average monthly operating costs. Operating costs include payroll costs, medical insurance premiums paid by the company, rent, and utilities. The average monthly operating cost is determined over a 4 month period between March – June 2019. For example, let’s say that that your company's average monthly operating cost is $10,000. If you multiply $10,000 x 2.5, you’ll come up with a $25,000 PPP loan amount.
It's my understanding that up to 80% of the loan can be forgiven if employees are retained at full pay through June 30, 2020. The loan forgiveness will not be included in your company’s income. Paperwork will need to be submitted in order to substantiate the loan forgiveness.
As it relates to the portion of the loan that’s not forgiven, your company will not pay more than 4% annual interest.
There are no SBA loan fees and your first payment can be deferred for 6 months or more. There are no early payment penalties if you decide to pay off the loan early.
Your SBA lender should be able to address your questions regarding this loan program.
In closing, the PPP details outlined above are subject to change until the SBA finalizes the program. Here's a link to the SBA website if you're interested in finding out more details: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources#section-header-0
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