Paycheck Protection Program (PPP)

The Paycheck Protection Program is an SBA loan to allow businesses to keep their workforce employed during the Covid-19 crisis. Applications for PPP must currently be made by June 30,2020.

Who may apply:

A business affected by the coronavirus pandemic and is classified as a “small business” as defined by the SBA. This includes all registered businesses with up to 500 employees.

How much can be borrowed:

A business may receive up to 2.5 times the average monthly payroll costs from 2019. Funds provided for payroll are capped at $100,000 annualized per employee (any non-cash benefits like health care, pension, etc are not included under the cap).

What can funds be used for:

Funds from the SBA Paycheck Protection Program may be used to cover payroll and/or mortgage interest, rent, or utility costs.

Payroll costs include employees’:

salaries, wages, commissions, tips;
payment for vacation, parental, family, medical, or sick leave;
allowance for separation or dismissal;
payment for employee benefits;
taxes assessed on compensation of employees.

Loan Forgiveness:

In order to be eligible for loan forgiveness, a business must: Funds used for the intended purposes (see above) within the 24 weeks immediately following your acquisition of the loan amount or by December 31, 2020 (whichever comes first);

Employee and payroll levels must be maintained;
Any changes made to the number of full-time employees or salaries between February 15, 2020 and April 26, 2020 must be restored by June 30, 2020.

UPDATE: the PPP Flexibility Act, has adjusted the forgiveness rules so that if a business can prove that it attempted to rehire its employees but was unable to do so, it may still be eligible for loan forgiveness.