Paycheck Protection Program
April 3, 2020
Dear Clients, Colleagues and Friends,
The most popular program from the CARES Act for small business owners this week has been the Paycheck Protection Program (PPP). Since being signed into law on March 27, 2020, the program has drawn the attention of most small business owners. The PPP which is being administered by SBA-certified lenders such as banks and credit unions, was expected to begin accepting applications today, April 3, 2020. Some banks have informed their customers that they expect delays in their ability to begin accepting applications and are awaiting further guidance from the SBA. Also, there have been changes to the PPP and additional guidance issued by the SBA this week. Below is a updated useful information regarding the PPP:
- Available to certain businesses with fewer than 500 employees, including sole proprietors and non-profits.
- Loans are based on a formula to be the lesser of (a) average monthly payroll costs during the prior year multiplied by 2.5 or (b) $10 million.
- Maximum maturity of 2 years, and interest not to exceed 1%. All payments are deferred for 6 months.
- Loans have the potential to be forgiven if certain criteria are met.
- Loans will be available through SBA-certified lenders, which include banks and credit unions.
- Loan proceeds can be used for certain payroll costs, healthcare, rent, utilities and other debts incurred by the business.
- More information can be found on the U.S. Department of the Treasury’s website at https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses
If you have any questions or need further information on the Paycheck Protection Program and/or application, please contact your P&N professional directly, or dial 212-736-0055 for immediate help. Stay safe.
Presti & Naegele