![]() If you use your loan for payroll and benefits costs, interest on mortgages, rent and utilities, your loan is eligible for loan forgiveness and you must apply to receive forgiveness.įurther, you must continue to pay your employees at normal levels during the 24 weeks following the origination of the loan.īorrowers are eligible for loan forgiveness for the following costs: What are the stipulations for loan forgiveness?īecause the PPP loan focuses on delivering immediate economic assistance to small businesses affected by the sudden economic recession, forgiveness is based on the employer maintaining or quickly rehiring employees, as well as maintaining existing compensation levels. No fees will be charged to borrowers to apply for or receive the loans. ![]() No collateral or personal guarantees are required to receive the loan.Loan payments will be deferred for six months.Loans issued prior to June 5, 2020, have a maturity of two years, while loans issued after have a maturity of five years.PPP loans carry an interest rate of 1% on any unforgiven portion.The terms of this loan will be the same regardless of lender and borrower: ![]() What can the PPP loan be used for, and what are the terms?Īccording to the SBA, in order to receive full loan forgiveness, you must use the funds must be used for payroll costs, interest on mortgages, rent and utilities with at least 60% of the forgiven amount going toward payroll. If you didn’t receive an EIDL loan, you can simply multiply that monthly average by 2.5 to request $20,625 in PPP loans.If the total payroll expenses for your business are $99,000 per year, your average monthly payroll cost would be $8,250 ($99,000 divided by 12).Add the outstanding amount of any COVID-19 Economic Injury Disaster Loan (EIDL) received between January 31, 2020, and April 3, 2020, after subtracting the amount of any "advance" received under this loan.Calculate the average monthly payroll costs.The amount is limited to a maximum annual amount of $100,000 per employee/payee.Īfter you determine your 12-month payroll expenses, The amount you can receive depends on your payroll expenses, incurred and paid, during the previous 12-month period on employees who principally reside in the U.S. Any business, nonprofit, veterans or Tribal business organization with the greater of 500 employees or that meets the SBA's size standard.Any food services business with more than one physical location and fewer than 500 employees per location.Sole proprietors, independent contractors and self-employed persons.Small businesses that meet the SBA's size standards.The following types of entities may qualify for a loan: The Paycheck Protection Program offers small businesses a loan in a time of extreme need. How do you qualify for the PPP Loan, and what can you receive? For unforgiven loans, payments will be deferred for six months. If the loan recipient uses the loan for these purposes and at least 60% of the forgiven amount is used on payroll expenses, the Small Business Administration (SBA) should fully forgive the loan. interest on mortgages, rent and utilities. ![]() The program provided small businesses with funds to pay for: This loan has allowed many small businesses to stay afloat during the sudden economic recession in 2020 and its aftereffects in 2021. For information on the third coronavirus relief package, please visit our “ American Rescue Plan: What Does it Mean for You and a Third Stimulus Check” blog post.Ĭongress passed the Paycheck Protection Program (PPP) loan as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to provide fast and direct economic assistance for small businesses and to preserve jobs for Americans. ![]()
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