What is PPP and how does it work?
What is the Paycheck Protection Program? The Paycheck Protection Program ( PPP ) is administered by the federal Small Business Administration (SBA) and provides COVID-19 relief funding to small businesses as well as individuals who are self-employed or are independent contractors if they meet program size standards.
What does PPP stand for?
An SBA-backed loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. The Paycheck Protection Program (PPP) provides loans to help businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. Borrowers may be eligible for PPP loan forgiveness.
Who qualifies for the paycheck protection program?
The program is designed for employers with 500 employees or less—this includes sole proprietorships, independent contractors and the self-employed, private non-profits and 501(c)(19) veterans organizations.
What is the purpose of the PPP?
The Coronavirus Aid, Relief, and Economic Security (CARES) Act added PPP loans to provide economic relief to small businesses nationwide adversely impacted by the COVID-19. The PPP is administered by the Small Business Administration (SBA) with support from the Department of the Treasury.
When should I apply for PPP forgiveness?
You must apply for forgiveness within 10 months after the end of the ‘Covered Period. ‘ which is the 24-week period that starts when you received your PPP loan. The lender (i.e. your bank) has 2 months to process your loan forgiveness application then SBA has three additional months to approve your forgiveness .
When can I apply for PPP forgiveness?
Borrowers can apply for forgiveness any time up to the maturity date of the loan . If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender.
Does the PPP affect unemployment?
The amount you receive from the PPP won’t be impacted by working and earning income—you’ll still be able to receive 2.5 times your monthly payroll cost. But if you are receiving unemployment benefits and are still partially working, your benefits may be reduced.
Do I need employees to qualify for PPP?
You don’t need employees to qualify for loan forgiveness under the Paycheck Protection Program. The PPP has specific rules for self-employed workers , independent contractors, and gig workers that allow them to reclaim salary lost due to the pandemic.
What is PPP safety?
According to the Occupational Safety and Health Administration (OSHA), personal protective equipment (commonly known as PPE) is used or worn by workers to protect them from dangers in the workplace that may cause serious injury or illness such as “chemical, radiological, physical, electrical, mechanical or other
How can I get my PPP forgiven?
Use the following tips on how to make sure your PPP loan is forgiven to get started: Use it for eligible expenses. Keep your employee headcount up. Don’t reduce an employee’s wages by more than 25% Document everything. Talk with your lender. Apply for loan forgiveness .
What are the rules for PPP loan forgiveness?
Basically, PPP loans issued before June 5, 2020, must be paid back in two years, and loans issued after that must be paid back in five years. No collateral or personal guarantees were required for the loan and no fees were charged to small businesses by the banks or credit unions authorizing the loans .
How long does it take SBA to approve PPP loan?
The SBA promises a turnaround time of 36 hours for their express loans. But, that doesn’t include the time it takes for the lender to approve the loan, which could tack on another few weeks. So, instead of 60-90 days , you’re looking at 30-60 days for the SBA loan processing time when all is said and done.
Does PPP check credit score?
As far as formal requirements go, there is no credit score requirement you must meet in order to qualify for a PPP loan . This is despite the fact that the PPP program technically falls under the SBA’s 7(a) loan program, which does feature an acceptable credit requirement.
Can I apply for a second PPP loan?
If you received a PPP loan in 2020, you may be eligible to apply for a second PPP loan if your business suffered a loss in revenue in 2020. Whether you now take your first or second PPP loan , these loans will have the same terms as the original PPP loan .