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Lenders will begin processing PPP loan applications April 3, 2020. We understand this program is based on a “first-come, first-served” basis. If the program runs out of funding, Treasury Secretary, Steve Mnuchin has said they will expand the program and increase funding if needed.

Applied Payroll is here to help you with the payroll information you need. During the past week we have talked with CPAs and lenders and believe we understand what the lenders are usually looking for. (The information lenders are requesting various slightly between lenders. It is important you visit with your lender as soon as possible.) Contact us today if you are interested in applying and need payroll information. We also have a PPP Worksheet that can help you understand how much your loan may be.

We strongly encourage you to contact your banker today and find out how they can help you with the submission of your loan application.

We are including additional information and links to resources that we think will help answer your questions.

We want to share several resources and links with you today. It appears that the processes for obtaining the various SBA loans are solidified and there is some clarity on how you can access these programs. The links below will help you understand how you may benefit.

10 Commonly Asked Coronavirus Small Business Loan Questions

Your most commonly asked questions about the SBA loans being offered to small businesses during the COVID-19 pandemic — answered. The U.S. Chamber of Commerce has put together a very good resource that will help you with common questions you may have. Click HERE to read.

Small Business Guide and Checklist

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses.

Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward. The administration has released more details including the list of lenders offering loans under the program. In the meantime, the U.S. Chamber of Commerce has issued this guide to help small businesses and self-employed individuals prepare to file for a loan. Click HERE for an easy to read flyer.

PPP Program Overview

Check out the SBA website for detailed information.

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

The Paycheck Protection Program will be available through June 30, 2020.

Who Can Apply

This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19.

Small businesses in the hospitality and food industry with more than one location could also be eligible at the store and location level if the store employs less than 500 workers. This means each store location could be eligible.

How to Apply

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.

Please download the PPP application to see what will be required. It is surprisingly easy. Applied Payroll will provide the necessary historical reporting you need. Click HERE to download the application.

Lenders may begin processing loan applications as soon as April 3, 2020.

Loan Details and Forgiveness

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

This loan has a maturity of 2 years and an interest rate of .5%.

If you wish to begin preparing your application, you can download a sample form to see the information that will be requested from you.

Other Assistance

In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are currently eligible to apply for disaster assistance.

Enhanced Debt Relief is also available in SBA’s other business loan programs to help small businesses overcome the challenges created by this health crisis.

Note: The information contained within is not tax or legal advice. These issues are complex, and applicability depends on individual circumstances. Businesses should consult tax or legal counsel before taking action on any of the items identified above.