Payroll Protection Program FAQ's
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What is the Payroll Protection Program (PPP)?
The PPP provides 100% federally guaranteed loans to small businesses through the Small Business Administration. It aims to assist small business owners facing challenges through COVID-19.
Am I eligible to apply?
To be eligible for PPP loans, you should be a small business, sole proprietorship, nonprofit, veterans organization, or tribal organization with no more than 500 employees. You must also meet the SBA’s affiliation requirements.
Do I meet affiliation requirements?
Affiliation means that your organization is controlled by another party. This will disqualify you from being able to receive PPP loans. You have affiliation if:
- Another entity is a majority shareholder; or
- Another entity is a minority shareholder with enough influence to control business operations through bylaws, stockholder agreements, or charter clauses
How do I apply?
If you are eligible, you can apply anytime before June 30, 2020 through the SBA’s websites.
- Apply here if you are a small business or sole proprietorship: https://ppp.sba.com/get-started/
- Apply here if you are self-employed or an independent contractor: https://1099.sba.com/get-started/
How much in loans will I be able to receive?
You are eligible for 2.5x your average monthly payroll costs from the past 12 months. However, you may not receive anymore than $10 million, and the annual salary for any employee must not exceed $100,000.
What are the terms of the loan?
While the loan amounts will be different for each company, the loan terms are set at a 1% fixed interest rate over a 2 year term.
Will I be able to receive loan forgiveness? How?
You are eligible for loan forgiveness if borrowers can:
- Keep all employees on payroll during the crisis or rehire all before June 30,2020; and
- At least 75% of loan proceeds go towards payroll costs
To do this, you must submit a written forgiveness request from your lender no sooner than eight weeks after you receive the loan.
I have more questions.
Published April 21st, 2020