The US Department of the Treasury (DOT) and the Small Business Administration (SBA) were tasked with implementing the Paycheck Protection Program (PPP). The PPP provides 100% federally guaranteed loans to small businesses with the goal of helping them keep their workers on the payroll.
The SBA recognizes that, due to the COVID-19 crisis, businesses may encounter difficulties with access to capital, workforce capacity, inventory and supply chain shortfalls, among other issues. In order to help deal with these problems, the PPP was established to provide businesses with a streamlined process to obtain a loan.
Loans obtained through the PPP may be completely forgiven, as long as the business uses the loan proceeds for certain expenses, most importantly payroll. Under the PPP, the maximum loan amount that a business can get is 250% of its average monthly payroll, up to $10 million. Loans are provided by banks directly to small business borrowers, not by the SBA. Recently, the DOT published an overview of the program which can be found here.
These loans are currently available to businesses with 500 or fewer employees, non-profit organizations, veteran organizations and tribal business concerns. Independent contractors and self-employed individuals may apply for a PPP loan starting April 10, 2020. Banks that are currently enrolled in the program can be found here. Check back often because new banks continue to be certified for the program.
The PPP application process is streamlined and requires only a minimal amount of information. There are, however, several good faith certifications that the borrower must make. The PPP Borrower Application Form can be downloaded here.
If you have questions regarding the Paycheck Protection Program, please contact the experts at Dowling Aaron Incorporated.
Robert D. Tookoian has been a practicing attorney for more than 20 years, providing legal services as both in-house and outside counsel. Mr. Tookoian’s firsthand experience in growing and managing businesses allows him to provide practical and actional advice his clients. His practice focuses on business transactions, healthcare and compliance. Rob’s diverse and extensive legal and business experience enables him to provide business owners and executive management with practical, business-oriented solutions to legal issues.