As part of the Coronavirus Aid, Relief, and Economic Security Act, also known as CARES, Congress earmarked $349 million dollars for the Paycheck Protection Program (PPP). The purpose of PPP is to help small business owners avoid laying off their employees during the pandemic and lessen the impact on the American economy. While it may be impossible to avoid all layoffs due to social distancing and other requirements, the Paycheck Protection Program has helped thousands of small business owners retain as many members of their staff as possible.
Who is Eligible to Apply for the Paycheck Protection Program?
You can apply to the program if you operate a small business with 500 employees or less. The maximum amount you can receive from PPP is $10 million dollars or 2.5 times the amount of your total payroll from last year. Although the federal government established the Paycheck Protection Program as a loan, some or all may be forgivable under these circumstances:
You used the funds to cover payroll, including employee insurance premiums and other benefits.
You do not have to repay up to 25 percent of the PPP loan if you used funds to keep your business opening. Typical expenses here include mortgage or rent, utility payments, business equipment, and interest on business loans taken out prior to February 15, 2020.
Most types of businesses with fewer than 500 employees are eligible to apply for a PPP loan, including the following:
Independent contractors
Non-profit organizations
Self-employed individuals
Sole proprietors
Tribal businesses
Did You Miss Applying for PPP or Need Other Financing Options?
As expected, applications to the federal Paycheck Protection Program numbered in the hundreds of thousands. That means you might have already missed your opportunity to apply because the program ran out of funding and Congress needs to reappropriate more funds. If so, you’re not out of luck. Spearing Capital & Consulting, Inc. has many loan options for small business owners. Please schedule an appointment with us to learn more about them.