The Paycheck Protection Program


 Paycheck Protection Program- $349 billion available

The Paycheck Protection Program (PPP) is a Small Business Administration (SBA) loan that is designed to help businesses continue to employ their workforce during the Coronavirus (COVID-19) crisis.

Who's eligible?

  • -Any small business that meets SBA's size standards
  • -Any non-profit organization, 501(c)(19) veterans organization, or Tribal business concern that has less than 500 employees or meets the SBA industry size standard if more than 500 employees.
  • -Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
  • -Sole proprietors, independent contractors, and self-employed persons

What's the details?

This loan will be fully forgiven if the funds are used properly and the company abides by the following terms:

  • -The funds are used for payroll costs (including benefits), interest on mortgages (incurred before February 15 2020), rent (under lease agreements in force before February 15, 2020) and utilities (for which service began before February 15, 2020).
    • >At least 75% of the forgiven amount must have been used for payroll.
  • -Payroll Costs Include
    • >Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
    • >Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
    • >State and local taxes assessed on compensation; and
    • >For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.
  • -All employees are kept on payroll and wages/salaries do not decrease for 8 weeks
    • >Based on employer maintaining or quickly rehiring employees
    • ~You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.
    • >Forgiveness reduces if amount of full-time employees declines or if salaries/wages decrease

No collateral or personal guarantees are required for this loan and neither government nor lenders will charge small business fees. Loan amounts can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount with a $10 million cap. This loan has duration of up to 2 years and an interest rate of 1%. Loan payments will be deferred for 6 months.

How do I apply?

Apply for the PPP Loan 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. Check with your local lender to see if it is participating. Find an eligible lender through SBA's website here, or check out this list of lenders in Alabama. All loans will have the same terms regardless of the lender or borrower.

You can download a copy of the PPP borrower application form to prepare your application and see what all information will be needed to apply with a lender.

Small Businesses and sole proprietorships can apply now. Independent contractors and self-employed individuals can apply starting April 10, 2020. Apply quickly because there is a funding cap!

For additional and accurate information visit SBA's website.

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