Stimulus Update: Small Business Relief
The bill that was signed into law by the President last Friday is almost 900 pages long.
Naturally the state hasn’t yet updated their existing processes to be in agreement with the federal law. The point is that we all will be working together on these issues well into next year and I will continue to post updates and answer questions throughout that period.
Today’s post is directed to all Small Business Owners.
The section of the bill that covers relief for small businesses is called the Paycheck Protection Program (PPP). The PPP program is administered through the SBA in the way of loans to small businesses. Below is a high-level summary of the loan terms. And how the funds can be used. I have already completed several applications and am ready to assist where I can. Please reach out to me if you need assistance with this process.
Here is a summary of key aspects of the SBA Loan Program (PPP):
Eligible businesses are those with less than 500 employees.
The maximum loan amount is the lesser of $10 Million or the average monthly payroll costs X 2.5
Payroll costs include employee compensation not greater than $100K/year plus benefit costs and payroll taxes, etc.
The loan can be used for payroll, benefits, rent, utilities. The loan cannot be used for real estate, business expansion, or capital equipment purchases.
The loan is nonrecourse (meaning you are not personally liable to repay the debt if your business is unable to).
If the loan is less than $25k then no guarantee or collateral is required. Loans larger than $25k require collator, however, you will not be disqualified if your collateral is less than the loan amount you are asking for.
If you use the loan in accordance with the provisions (salary, insurance, rent, utilities, etc.) within 2 months of receiving the money, then the loan will be 100% forgiven.
As details about the bill emerge and state policies and laws change as well, be sure to key an eye on my website and social media for updates and analysis to help you and your business weather this crisis.