The Paycheck Protection Program is a loan program through the U.S. Small Business Administration that grants up to $349 billion in forgivable loans to businesses with 500 or fewer employees as a part of the CARES Act. The program runs from April 3rd to June 30th, 2020. Businesses in certain industries with more than 500 employees may also qualify. These loans are designed primarily to cover the costs of payroll for up to 2.5 times average monthly payroll expenses but the funds can also be used for employee benefits (such as health insurance), mortgage interest, rent, and utilities.
Who can apply?
Small businesses that meet the SBA’s size standards, sole proprietors, independent contractors, self-employed, 501(c)(3) non-profits, 501(c)(19) veterans organizations and tribal businesses
How can you apply?
You can go to any approved FDIC-insured lender that is participating in the Paycheck Protection Program and bring with you a completed PPP application. If you are granted a PPP loan, you will accept a 1% fixed interest rate and your loan is due within 2 years with no early payment penalty. You can defer loan payments for up to 6 months. You can find your local eligible lender by going through the SBA website by clicking here.
How much of the loan you will have to pay back at your loan’s maturity date depends on how much is used for payroll. At least 75% of the loan must be used for payroll for the loan to be forgiven. If you reduce your employee headcount, hours, salaries or wages, you will have less of your loan forgiven.
For a more detailed guide on the Paycheck Protection Program, please view the US Treasury PPP Fact Sheet.
At Solid Health Insurance Services, we are always here for our individual and small business clients. We strive to keep you up-to-date and informed on what matters most to you and your business. Please contact us at email@example.com or at 310-909-6135 to go over the individual, family or small business health, dental, vision, life and long-term care insurance.