Have you heard of the PPP Loan?
PPP stands for Paycheck Protection Program. This program was introduced in 2020 to help small business keep workers on payroll but can also be used for rent, utilities, worker protection costs related to COVID-19 amongst other expenses. Currently the application deadline has been extended to May 31, 2021.
Do you qualify?
The following businesses qualify for the PPP loan.
- sole proprietors
- independent contractors
- self employed persons
- Any small business concern that meets SBA’s size standards (either the industry size standard or the alternative size standard)
- Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
- 500 employees, or
- That meets the SBA industry size standard if more than 500
- Any business with a NAICS code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
Do you have to pay back this loan?
The SBA (small business administration) will forgive loans IF all criteria are met and the funds were spent on eligible expenses. However, you do need to apply for loan forgiveness.
- PPP loans have an interest rate of 1%
- Loans issued after June 5, 2020 have a maturity of five years
- If a borrower does not apply for loan forgiveness, payments will be deferred 10 months
- no collateral or personal guarantees are
- the government will not charge small businesses any fees
- the lenders will not charge small businesses any fees
How to Apply
If you wish to apply for the PPP loan are are a first time borrower, head over to the PPP application form. Before you head over to apply, check out how to calculate first draw PPP loan amounts and determine what documentation you will need to provide.
If you wish to apply for the PPP loan but are a second time borrower, head over to the PPP Second Draw Borrower form
PPP Loan Forgiveness
A borrower can apply for forgiveness once the loan has been used BUT the borrower needs to apply for forgiveness within 10 months after the last day of the covered period. Please refer to the PPP loan forgiveness site for more information.