A key component of the recently passed Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is the Paycheck Protection Program (PPP), which authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. These loans are now available from numerous participating lenders.
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 COVID-19. Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.
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 percent of the forgiven amount must be used for payroll). Loan payments will also be deferred for six months. Loan 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.
We have also included direct links to online applications currently available for some large financial institutions below: