Information Regarding CARES ACT – Paycheck Protection Program (PPP) Loans

On April 3, 2020 Congress rolled out Paycheck Protection Program (PPP) loans for small businesses struggling as a result of the COVID-19 crisis. Banks are currently accepting and processing applications for the Paycheck Protection Program (PPP) loans. These loans are generally available to all employers with less than 500 employees. Sole proprietors, self-employed workers, independent contractors, and consultants may also be eligible for this loan. This program will be made available through June 30, 2020.

As a result of a significantly high volume of applications sent to lenders and current limitations on SBA authorized funding, not every qualified applicant will be receiving loan proceeds from the PPP. The later an application is submitted, the less likely that application is to be processed and registered with the SBA before funding for the program runs out.

Since time is of the essence, we encourage almost all of our small business clients to apply for these loans. The harsh economic uncertainty brought on by recent events could make you eligible to apply for a loan request if it is necessary for the continued operation of your business. Affiliation rules for the PPP loans can be found here.

A main feature of these loans is that they come with tax free forgiveness. The PPP loan program provides funds for approximately 2 months of:

Payroll Costs

  • State unemployment taxes
  • Pension plan contributions
  • Group health insurance costs

Other Expenses (dated or in place before 2/15/20):

  • Rent
  • Utilities
  • Interest on other loans.

If the employer uses the funds for these purposes only and does not cut their number of employees or reduce their compensation, the loan is forgiven in full. Forgiveness will be reduced based upon whether these employee counts and compensation have been restored by June 30, 2020. Therefore, it is important to start planning now if you are considering submitting an application.

While this is technically an SBA-related project, the plan is to avoid all of the SBA “red tape” and allow employers to go directly to their banks to save you time and energy. Frequently asked questions (FAQs) concerning PPP loans can be found here and will be continually updated with more information.

It is important to apply now before PPP funding runs out. Contact us or consult your banker about the availability of one of these PPP loans as soon as possible. You can download the PPP application here to get started.

Given the limitations on SBA authorized funding and the significant volume of applications already submitted all qualified applicants will not receive loan proceeds under the PPP loan funding program.  The later an application is submitted, the more likely it is that the application will not be processed and registered with the SBA office before PPP funding runs out.  As a result, some banks will not be able to qualify everyone at this time and SBA registration for applications will become more limited as time goes on.

We will be monitoring the status of PPP loans and will update you as new information arises. If you have any questions, please do not hesitate to give us a call.