PPP is an SBA loan that helps businesses keep their workforce employed during the coronavirus (COVID-19) crisis.
NOTICE: PPP resumed April 27.
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest or utilities.
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.
Apply to the Paycheck Protection Program PPP
The Small Business Administration reopened its Paycheck Protection Program. There is now more than $300 billion to give to small businesses that are struggling to get through the COVID-19 crisis.
Who can apply?
Any business with fewer than 500 employees can apply to this program. Businesses with 500 or more employees can apply as long as they show that they are small compared to the industry-standard size of other businesses.
Non-profits can apply, too (501c3, and 501c19). Businesses that provide food service or hospitality – like hotel rooms – can apply if they have more than one location and employ fewer than 500 people. You can also apply if you are the only owner of your business, or are an independent contractor or are self-employed. If you are the owner of a franchise like Burger King, then check the SBA Franchise Directory to see if you’re eligible.
How do you apply?
The application process is simple. You fill out only one form that is two pages long. The form will ask for the business owner’s information – Name, Address, Primary Contact, Business Tax ID and phone number.
The form will then ask if the applicant was: 1.) in operation on Feb. 15, 2020, 2.) affected by the economic crisis so much that the loan is necessary, 3.) will use the money to retain workers, maintain payroll or make necessary business-related purchases and 4.) that the applicant has not received another PPP Loan.
The form will also ask you to confirm the size and type of your business. Franchise owners will be asked if their business is listed on the SBA Franchise Directory. You will also need:
- EIN Number (or, if a sole-proprietor without an EIN, your SSN).
- The legal name and operating name (doing business as) of your business.
- Full name, home address, title and ownership percentage of each owner of this business with greater than 20 percent ownership.
- Be ready to input the required payroll information (for two and a half months) to calculate your loan amount.
- IRS form 940 (annual payroll tax filing form) and other documentation to substantiate the payroll figures you enter in this application (failure to provide documentation to substantiate payroll will result in an inability to approve your loan).
The loan must be processed through an authorized institution. Most major banks will be able to process the loan and many credit unions will be authorized to process the loan. You can also get the PPP loan through Paypal, Cabbage and similar institutions.
Do you have to pay it back?
You don’t have to ever pay this back if at least 70 percent of the money goes toward payroll expenses. So by paying your employees at least 70 percent of the PPP money, you never have to repay this money.
Why is it important to apply?
The purpose of this money is to help small businesses get back to business when this crisis is over. Not only for the sake of the business owners, but also for the employees who depend on their paychecks and the people who depend on the business.
The PPP is a program that anyone who has a business needs to apply to. It’s free money. If you use the loan for your business expenses, then you don’t have to ever repay it. Our minority communities have not applied to the PPP, but we need to. During this economic crisis, our small businesses, the heart of our communities, are the ones most in danger of going out of business. Don’t let that happen. Every dollar helps and this money can help save our businesses and our communities.
HERE IS MORE INFORMATION ABOUT THE PROGRAM:
For affiliation rules applicable for the Paycheck Protection Program, click here.
The Interim Final Rule for Applicable Affiliation Rules for the Paycheck Protection Program as posted in the Federal Register.
Consider these steps as you ready your business for potential funding:
- If you have an existing lender, contact them as soon as possible and start a PPP application
- If you don’t have a lender, these sources are working to process PPP applications quickly:
THESE LENDERS ARE ACCEPTING NEW CUSTOMERS
- FIRST INDEPENDENCE BANK
- FIVE STAR BANK
- HUNTINGTON BANK
- LEVEL ONE BANK
- LIVE OAK BANKING COMPANY
- NEWTEK SMALL BUSINESS FINANCE, INC.
- OXFORD BANK
- SQUARE CAPITAL
- TCF NATIONAL BANK
- THE STATE BANK
- U.S. BANK, NATIONAL ASSOCIATION (BANCORP)