Small Business: Paycheck Protection Program

This week has been filled with rapidly changing details surrounding the CARES Act and the benefits for individuals and businesses. In this post, we are focusing on summarizing the Paycheck Protection Program for small businesses with the latest information as of Friday, April 3.

We encourage everyone to consult official websites and press releases, such as the Small Business Administration, the US Department of the Treasury, and the IRS  for current and accurate information.

With regards to the Paycheck Protection Program, it is summarized on SBA.gov as follows:

The Paycheck Protection Program is a 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.

You can apply through any existing SBA 7(a) 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 in the program.

Other details:

  • Available for any businesses with under 500 employees, including sole proprietors, independent contractors, and self-employed individuals
  • Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels
  • At least 75% of the forgiven amount must have been used for payroll, but the loan may also be used for interest on mortgages, rent, and utilities
  • The loan has a maturity of 2 years and an interest rate of 1%
  • Loan payments will be deferred for 6 months
  • View the PPP Fact Sheet from the US Treasury for more information regarding eligibility and forgiveness requirements

How to apply:

  • Small businesses and sole proprietors may apply beginning Friday, April 3, independent contractors and self-employed individuals can apply beginning on Friday, April 10.
  • You can apply through any existing Small Business Association lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating.
  • View a copy of the PPP borrower application to see the information that will be requested when you apply with a lender.

Lenders and CPAs are grateful for your patience as we attempt to provide the best service to our clients during this time of uncertainty and change. Let us know if you have any questions regarding the Paycheck Protection Program with regards to your small business!