A background check can be any employer’s best bet against...
Read More
A background check can be any employer’s best bet against...
Read More
Small businesses hurt by the coronavirus pandemic may find relief through the SBA Paycheck Protection Program (PPP).
This program is part of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act launched on April 3, 2020. The entire stimulus bill—the largest in our nation’s history—is designed to bolster the economy through financial hardship. And the PPP provides relief specifically for small businesses and their employees.
The short version is that the Paycheck Protection Program provides funds to cover payroll and other essential costs for small businesses. A PPP loan is forgivable (for the most part), and the lender is not permitted to charge small businesses fees or interest.
However, there is a funding cap on this program, as well as a few guidelines you must follow to ensure your loan is forgiven. If you could use extra funding at this time, here is everything you need to know about the Paycheck Protection Program.
The Paycheck Protection Program is exactly what it sounds like. It’s a program put in place to help small businesses keep their workers employed through the coronavirus pandemic.
Under the PPP, small businesses and self-employed individuals receive a forgivable loan to cover the cost of payroll for a period of 8 weeks between February 15 and June 30, 2020. These loans are backed 100% by the U.S. Small Business Administration.
Lenders will not charge small businesses any fees or interests. There are no collateral requirements, credit elsewhere tests, or personal guarantees needed.
If you own a small business with no more than 500 employees, you are eligible to apply for a PPP loan. Nonprofits, independent contractors, sole proprietorships, veteran organizations, tribal concerns, and self-employed individuals are also eligible.
Businesses of more than 500 employees may still be eligible for the Paycheck Protection Program if they operate within certain industries. Check the SBA website to see if you meet the size standards of the U.S. Small Business Administration.
If you already secured an EID loan between February 15, 2020, and June 30, 2020, don’t worry; you didn’t miss out. You can refinance your EID loan into a PPP loan also add outstanding loan payments to your payroll expenses.
As long as you remain in business for the full-time period from February 15, 2020 – June 30, 2020, you will receive a maximum loan equaling 250% of your average monthly payroll costs during that period.
If you were not in business after February 15, 2020, your maximum loan amount equals 250% of your average monthly payroll costs for January and February.
Eligible payroll costs include:
The following costs are not included when calculating your Paycheck Protection Program loan:
If and when you receive a PPP loan, you may use the funds for 8 weeks of payroll costs plus benefits. Mortgage, rent, and utilities may also be paid using your Paycheck Protection Program loan.
If you use any funds for expenses other than the approved categories listed above, that fraction of your loan will not be forgiven.
On that note . . .
Yes, the SBA will fully forgive your PPP loan as long as you fulfill the necessary requirements. You must:
This last point is of extreme importance. To qualify for loan forgiveness, you must keep employees on your payroll. Or, in the event that you were forced to close your doors and let your staff go, you must rehire your employees quickly.
You can apply through a local lender, including:
You can find a list of participating local lenders at the SBA website.
Sole proprietorships and small businesses can initiate the application process as of April 3,2020. Those who are independent contractors or self-employed can apply starting April 10, 2020.
If you hope to secure a PPP loan, begin the process as soon as possible. There is a funding cap, and not every business is guaranteed to receive funding.
These are undeniably challenging times for small business owners. While the government does its best to help you keep your doors open, we at PeopleG2 want to do all we can to help you thrive.
Check out our guide to succeeding as a remote team or learn about our mobile screening technology for remote hiring.
And, as always, let us know what we can do to support you, your company, and your team.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.
The FDIC has published a final rule designed to revise and codify the Statement of Policy that appears in Section 19 of the Federal Deposit Insurance
Reliable FCRA compliance support can help you and your team feel more at ease throughout the hiring process. Pre-employment screening is absolutely essential for protecting
If you are doing business in California, one of the big changes in hiring has been the California Fair Chance Act. Over the last several
Schedule a call with one of our industry experts, who will answer questions about our process, service offerings, pricing and more. Learn why we provide this valuable service, and how we can make a difference in your organization.
