If you own a business or are an independent contractor, you may be wondering how you will make payroll during tight financial times, such as the pandemic. Fortunately, many qualify for the Paycheck Protection Program; the best part is that if you spend the allocated funds on payroll and business-related expenditures, it may be completely forgivable!
Here is what you need to know about applying for a PPP, or Paycheck Protection Program, Loan:
Currently, you can apply for a PPP loan even if you received one under the first pandemic stimulus package. The rules for eligibility are slightly different, but if you have not yet received a PPP loan, your application is treated as a new borrower. If you did already receive a PPP loan, you may again be eligible if you are not asking for more than $2 million dollars and if you employ fewer than 300 people. Good news for independent contractors and the self-employed: if you can show a loss of 25% gross income in any quarter during the year 2020, you are eligible for funds!
As with any time of turmoil, there are scammers out there. Be wary when hearing from solicitors about helping you secure a PPP loan; you don’t need their assistance and you should only work with the Small Business Administration (SBA) and SBA approved lenders.
PPP Loan Application
It starts with a completed application from the SBA website. The application is easy to follow and will identify the pertinent documentation that you need.
PPP Fund Forgiveness
Remember that your PPP loan may be forgivable if you spent it according to the terms of the program. For instance, you can pay for certain operating expenses and related supplies- including payroll. You may also use money for damages to your business or expenses to protect those working for you, such as to purchase PPE for your staff as issued by OSHA or CDC. Your lender will outline what you can spend your PPP money for loan forgiveness.
The Consolidated Appropriations Act extends the deadline for applying for the Paycheck Protection Program through March 31, 2021- or sooner, if funding runs out. Apply as soon as possible to ensure your PPP loan in 2021.
Make sure to consult with and check the Small Business Administration PPP program website for updates and information regarding applying for a PPP loan if you need it; many that have already received forgivable loans are again eligible, based on the most recent pandemic stimulus package legislature. For more information on how to navigate tough financial waters, talk to the money experts at Navigate Firm today.