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The Paycheck Protection Program is an important initiative created to help small businesses keep employees on payroll during the Coronavirus Pandemic. This program provides loans to businesses with less than five hundred (500) employees to cover payroll costs and employee benefits, mortgage interest incurred before February 15, 2020, rent and utilities under lease agreements in force before February 15, 2020 and utilities for which the service began before February 2020. This program also applies to self-employed individuals, sole proprietorships, and independent contractors. It is important to note that payroll costs are capped at $100,000 per employee. These loans apply to costs incurred from February 15 through June 30, 2020.
In terms of the loan amount, the maximum amount is $10 million to cover payroll and certain other expenses, or 2.5 times your total payroll expenses for the loan period. An important and attractive feature of this program is loan forgiveness. The program forgives loans covering costs for the first eight weeks of the loan for companies able to keep employees on payroll or continue paying bills throughout the coronavirus crisis. When submitting an application under the Paycheck Protection Program, you will be required to provide basic identifying information about the business, average monthly payroll, number of jobs supported by your company, and the specific use of the loan money, among other information.
If you are interested in obtaining a loan under the Paycheck Protection Program, the application can be found on the Treasury Department’s CARES Act resource page. Once you have gathered all the required information, you should contact your bank or approved lending institution in order to begin the application process.
Stay tuned to this blog for more detailed information once more guidance is issued later this week or early next week.