The Paycheck Protection Program: What You Need to Know.
Overview
The Paycheck Protection Program is a loan program created by the federal government to provide a direct incentive for small businesses to keep their workers on the payroll during the COVID-19 pandemic.
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% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
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.
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.
Lenders may begin processing loan applications as soon as April 3, 2020. The Paycheck Protection Program will be available through June 30, 2020.
Have More Questions?
Our HR Consulting and Training Team is available free of charge to answer your Coronavirus related questions. Contact:
Randy Woehl 913-333-3397 rwoehl@bukaty.com
Christina Glapa 913-222-5562 cglapa@bukaty.com
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