Help with Paycheck Protection Program and Economic Injury Disaster Loan Grants



The Coronavirus COVID-19 has spurred the US Government to act with unprecedented speed with the signing of the CARES Act and a $2 trillion stimulus package to provide relief for the disastrous economic fallout of the Coronavirus disease.

The CARES Act allocated $350 billion towards the Paycheck Protection Program (PPP) and President Trump announced Tuesday that the government would approve an additional $250 billion funding given the broader needs discovered. This program is designed to support small businesses in their efforts to retain employees on their payroll. Below are some of the highlights of the program.

What Businesses Qualify for the Small Business Administration’s Paycheck Protection Program?

Small businesses with fewer than 500 employees, including sole proprietors and independent contractors, can apply for the loan.

How Much Money Can I Borrow?

The PPP provides loans up to $10 million based on the level of the small business’s “payroll costs” which include compensation, benefits, and state and local taxes. The loan amount is calculated as 2.5 times the average monthly payroll costs for the previous calendar year or the previous 12 months. Seasonal-based businesses can use a more tailored base period.


Is the PPP a Forgivable Loan?

The loans are designed to be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities. Should the loan qualify for 100% forgiveness, they are essentially grants from the government. At least 75% of the forgiven amount must be used for payroll costs.

Forgiveness of the loan is based on an employer maintaining or restoring employee headcount and maintaining salary levels by June 20, 2020. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decline.

Small businesses will be required to submit a request for forgiveness with documentation support for how the funds were used including payroll and non-payroll reports and evidence of payment along with support showing that the small business has retained or restored its headcount.