Paycheck Protection Program – The COVID-19 pandemic has caused many businesses to close their doors temporarily. Many workers were laid off as a result… and some businesses had to shut down completely.
As a result, the federal government has decided to partner with the Small Business Association (SBA) to help keep small businesses afloat.
The idea? A loan to help keep workers on the payroll so workers don’t have to go without, and so small businesses don’t have to shut down or lay people off.
What Is The Paycheck Protection Program?
As per the SBA website, the Paycheck Protection Program is a loan made out to small businesses in order to provide an incentive to keep workers on the payroll.
It’s a forgivable loan, but only forgivable on the condition that all workers are kept on the payroll and the money is used on payroll, rent, utilities, or interest on a mortgage. 75% or more of the money must be used on payroll.
The loan has a maturity of 2 years and a 1% APR.
Related: Student Loan Forgiveness Due To COVID-19
Do You Qualify?
Your business may qualify if it has been affected by COVID-19. That is, if it has been forced to shut down or has seen a drastic decrease in revenue.
The following business structures are eligible:
- Any small business that meets the SBA’s size standards
- Any business, 501(c)(3) nonprofit, 501(c)(19) veterans organization, or Tribal business concern (as per the Small Business Act, 31(b)(2)(c) with less than 500 employees:
- If any of the above businesses that meet the SBA industry size standard (if they have more than 500 employees)
- Any business with a NAICS code beginning with 72 with more than 1 physical location and employs less than 500 per location
- Any sole proprietor, independent contractor, and self-employed person
Check the SBA website about the Paycheck Protection Program. The first round of loans is no longer available, but there are future rounds coming.
The program ends June 30, 2020. So check the website now and see if you’re able to get a small business loan!