The US treasury department has released their guidance on applying for the Paycheck Protection Program (PPP) loan. We wanted to share this information with you. Here are the key points:
- Application period begins on Friday April 3rd. Applications can be made through your local bank. FIRST COME, FIRST SERVE – application period ends on June 30th, but there will be funding caps.
- You need to complete the application form.
- You will also need to submit your payroll documentation with your application to your lender of choice. Your bank can process your completed application.
- Size of loan can be up to 2 months of your average monthly payroll cost from the last year (2019), PLUS an additional 25% of that amount
- This is subject to a $10,000,000 cap for max loan size
You will owe money when your loan is due if you use the loan amount for anything other than the following: - You will also owe money if you do not maintain your staff and payroll. This includes:
- Number of Staff – Your loan forgiveness will be reduced if you decrease your full-time employee headcount.
- Level of Payroll – Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
- Re-Hiring – You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.
- You must submit a request for loan forgiveness to the lender servicing the loan. This will include:
- Documents verifying the number of full-time equivalent employees and pay rates
- Payments on eligible mortgage, lease, or utility obligations
- All loan payments are deferred for 6 months.