paycheck protection program

­­As a business owner, you’re expected to be so many things; knowledgeable, confident, an expert. But, no one could be an expert on what’s happening around us today, and no matter how much confidence you have on the job site, it’s okay to be worried about sustaining your business. Downright scared, in fact. But, the Paycheck Protection Program can help your business now.

Asking for help is a sign of strength, and there are some tools and resources available to help during this time of uncertainty.  Several state programs and the newly passed federal CARES Act could help you continue to run your business and support any employees that are affected by the impact of COVID-19.

The Facts about the Paycheck Protection Program (PPP)

The PPP is a Small Business Administration forgivable loan that can help keep you operational during this time as business becomes uncertain. Since the loan is forgivable, that means you don’t have to pay it back… as long as you use the money to cover specific expenses.

So, here are the high-level, cut-to-the-chase details.

Who is eligible?

You are eligible for the loan if:

  • The business employs 500 employees or less
  • If you are a sole proprietor, independent contractor, or self-employed

What is the maximum amount I can borrow?

  • You are eligible to borrow 2.5 times your average monthly payroll expenses (up to a total of $10 million).
  • The loan is intended to cover 8 weeks of payroll expenses and other payments towards debt obligations.

What is the covered period of the loan?

  • The period during which expenses can be forgiven is from 2/15/2020 to 6/30/2020.
  • You can choose which 8 weeks you want to count towards the covered period.

How is the loan forgiven?

  • If you use the loan money for payroll and existing payments on mortgages, rent, leases, and/or utilities, that portion is forgiven and you do not have to pay it back.
  • If you would like to use the loan for other expenses, you can, but that portion of the loan will not be forgiven and you’ll have to make payments on it like any other loan.
  • The purpose of the loan is to help you retain your employees, at their current pay
  • Keep all of your employees, the entirety of the loan will be forgiven.
  • Lay off employees, the forgiveness will be reduced by the percent decrease in the number of employees.
  • If you have already laid off some employees, you can still be forgiven for the full amount of your payroll cost if you rehire your employees by 6/30/20.

Pro Tip

Gather important payroll and expense documents carefully, before you apply and after, to properly document your forgivable expenses.

When is the loan forgiven?

  • The loan is forgiven at the end of the 8-week period after you take out the loan.
  • You will have to work with your lender to verify the covered expenses and the total amount of the loan that will be forgiven.

Do I need to pay any interest?

  • No, if you use the funds as intended and the amount is fully forgiven, you pay no interest.
  • If a portion of the loan amount is not forgiven, it will be subject to the loan terms agreed upon by you and the lender.
  • The terms of the loan not forgiven may differ on a case-by-case basis. However, the max. is a 10-year term with interest capped at 4 percent and a 100 percent loan guarantee by the SBA. There are no loan fees, and collateral requirements and personal guarantees are waived. Payments will be deferred for at least six months and up to one year starting at the origination of the loan.

When is the application deadline?

Applicants are eligible to apply until 6/30/20.

How do I apply for the PPP?

Contact your bank to see if it is an SBA-approved lender. If your bank is not an SBA-approved lender, you can contact the SBA to find one.

FIND SBA-APPROVED LENDERS

Without a doubt, there is more complexity around this program than what we’ve shared here. To dig further into the details on PPP and other SBA loans, go direct to the source: Check out the U.S. Small Business Administration website.

paycheck protection program webinarFor other ways to support your business right now, check out our webinars and remote business resources that can help you work smarter and stay safe and healthy. And, if there’s anything that the Harvey team can do to help you during this time, please let us know.

 
 
 
We wanted to make you aware of Paycheck Protection Program and how it may be able to help your business. The SBA determines which businesses qualify. Harvey does not make any representation that your business would qualify.

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