Here’s what you need to know to get a PPP loan:

What is the Paycheck Protection Program?

The Paycheck Protection Program provides forgivable emergency loans The Paycheck Protection Program was packaged within the larger CARES Act passed by Congress in 2020. The program began as a $350 billion effort to provide small businesses with cash flow assistance loans, which were backed by the Small Business Administration (SBA) and 100 percent federally guaranteed.

Don’t Let The “Paycheck” In the Name Fool You.

Don’t let the “paycheck” in the name fool you into thinking you wouldn’t qualify for this forgivable loan. Suppose you don’t have staff headcount, payroll, and benefits to calculate. In that case, your application process (for the loan and later for forgiveness) should be much more straightforward.

You Still Have Time To Apply – But Hurry!

The Government put the Paycheck Protection Program in place to save businesses from closing and letting go of employees. The deadline to apply for the loan is May 31, 2021. This extension still gives you time to apply for the loan.

How Much Money Can You Get?

First-time loans continue to be capped at 2.5 times average monthly payroll costs, with a maximum of $10 million.

Second PPP loans have a $2 million maximum and generally use the 2.5 times average monthly payroll guideline. But the hard-hit accommodation and food service industries can borrow up to 3.5 times average monthly payroll costs.

Who Qualifies?

According to the SBA, the following entities are eligible for a PPP loan:

• • Any business, non-profit organization, veteran’s organization, or tribal business.
  • Sole proprietors, independent contractors, and self-employed persons.
  • Restaurant and Food Service falling under a NAICS starting with “72” and has 500 or fewer employees per physical location. Each location can apply for a PPP loan. 

Yes – Self-Employed Individuals Qualify

If you’re a self-employed individual, gig-worker, or contractor, you can take advantage of the Paycheck Protection Program.

Both sole proprietors with and without payroll costs qualify for the PPP loan. If you’re a sole proprietor without payroll costs, your PPP loan amount is calculated based on your gross income.

Your PPP loan amount will be your gross income, up to a maximum of $100,000, divided by 12 and multiplied by 2.5 (which would qualify you up to $20,833.00)

The funds you receive can be used for any business expense including:

• Payroll costs
• Benefits
• Mortgage interest
• Rent
• Utilities
• Supplier costs and expenses

If you do not apply for loan forgiveness, then these loans must be paid back within five years and come with a one percent interest rate.

Apply for Forgiveness and Pay Nothing

If you spend your loan on payroll, rent, mortgage interest, or utilities, the Government may forgive all or part of your loan not to have to pay it back.

What Are You Waiting For? Apply Today

There are no tax ramifications with the PPP loan program because it’s either a forgiven debt, or it’s a standard loan with a 1% payback, which is an expense to the business.   So that’s a great program since there are no taxation issues involved for your business.

Hurry! The deadline has been extended until May 31st, 2021. Search online to learn more and apply today.