Update April 27, 2020
The SBA’s $659 billion Payroll Protection Plan emergency loan program relaunched at 10:30 a.m. ET on Monday, April 27. Many lenders already had a backlog of applications ready to upload into the system and many business owners are reporting delays. (CNN)
- eBook Download: I Got My PPP Loan, Now What?
The new bill includes:
- $310 billion in the replenishment of PPP funds
- $60 billion for the Economic Injury Disaster Loan program
- $75 billion for hospital support
- $25 billion for a new coronavirus testing program
What this means for you
If you have not filed for a PPP loan, and you and your advisor decide it is the right choice for your business, you have another chance to apply. Call your bank or financial advisor to start the process—if the first round of funding is any indication, this window of opportunity will be short.
If you have already applied for a PPP loan, please check with your lender about the status of your application in the queue for approval. You may also stop the process once the loan is approved, if you decide you no longer need the funds.
Clients of simplicityHR by ALTRES can get their PPP reports by logging into HR Symphony.
The Paycheck Protection Program at a Glance
The SBA-administered Paycheck Protection Program (PPP) is an emergency loan program enacted as part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The program is intended to assist businesses in keeping employees on payroll while riding out the period of national shutdown due to COVID-19.
The program provides loans that the SBA says may be forgiven if used to cover payroll, most mortgage interest, rent, and utilities amid current economic uncertainty related to coronavirus. (Source).
Among the Hawaii businesses who secured PPP funding were 11,400 local companies — supporting payrolls for an estimated 170,000 jobs statewide – who had $2.1 billion in loans processed by the seven, SBA-approved members of the Hawaii Bankers Association. (Source)
According to the U.S. Department of Treasury, loan forgiveness is based on the monies being used at least 75% for payroll, including benefits, which must be maintained at normal levels. Forgiveness decreases if jobs and salaries are reduced but may be adjusted if employees are rehired. (Source PDF)
Key points about the PPP loans for eligible employers:
- Up to $10 million available in federally backed, zero-fee loans.
- Covers up to eight weeks of funding.
- Requires no collateral or personal guarantees.
- Will have the same terms regardless of borrower or lender.
- Payments are deferred for six
More details here: SBA Paycheck Protection Program
Who is eligible for Payroll Protection Program loans?
Most businesses with fewer than 500 employees are eligible to apply, including certain nonprofits, veterans’ organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors.
Independent contractors were able to apply for the loans on April 10, 2020.
For businesses in the hard-hit hotel and food service industry, the 500-employee rule is applied on a per physical location basis. (US Treasury Fact Sheet PDF)
- Coronavirus Emergency Loans: Small Business Guide and Checklist (U.S. Chamber of Commerce PDF)
- PPP Overview and Fact Sheet PDFs from the US Treasury Department
How to get a loan through the Payroll Protection Program
1. Fill out the application. The application has been streamlined as part of a process designed to minimize red tape. The instructions on the back say it should take 8 minutes to complete—but don’t procrastinate on this one.
2. Pull together required information and documentation. The application requests are straightforward and include:
- Identifying information for your business
- Business tax id number (TIN)
- Average monthly payroll and number of jobs your company supports
- The intended use of the funds.
Clients of simplicityHR by ALTRES can use the PPP Loan Report generator in HR Symphony to pull everything they need in seconds.
3. Talk to your bank as soon as possible. The loans are being made available through existing Small Business Association (SBA) lenders, federally insured depositories and credit unions, and other approved financial institutions.
The SBA is expected to issue additional guidance as the program is reopened. This page will be updated as more information becomes available.
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This material is provided for informational purposes only. It is not intended to constitute legal advice, and reader should consult with their advisor or counsel before taking any actions based on the information contained within this material.