Paycheck Protection Program
What is Paycheck Protection Program?
We have been asked to share what the paycheck protection program, and how it can help small businesses? The program was designed during COVID-19 to help small businesses prevent layoffs or furloughs of their staff. It seems to be a hybrid of a loan and a grant. The program allows employees to keep their health benefits should they get sick as well as receive their regular paychecks.
Who Can Apply?
Many businesses have already partaken in the program, but a lot of them don’t know if they qualify. The government sees any small business concerns that meets SBA size standards of their industry. This is inclusive of the following:
- Business nonprofit organization
- Veterans organization
- Tribal business concern of the small business act
- Sole proprietors
- Independent contractors
- Self-employed persons.
Paycheck Protection Program Benefits
The benefit of the loan is that it can be completely forgiven if the father use for payroll costs, interest on mortgages, read and utilities. Another great feature is that the loan can be deferred for six months with no collateral or personal guarantees. Neither lenders, nor the government can charge them more than small business fee. With such strict rules forgiveness is only based on the employer maintaining or quickly rehiring employees and maintaining salary levels. This loan has a maturity of two years and interested rate of 1%. All-in-all, as long as the employer keeps their word and uses it for the designed purpose, there is little consequence of receiving it, and the loan will be forgiven.
The Paycheck Protection program is not affiliated with Business Line of Credit, Merchant Cash Advance, or any type of standard business loan. This is important to know, as these types of loans require payback with the standard APR rates and payback periods. MCA’s, Line of Credits, and Standard business loans typically have no forgiveness programs either. To read more about loans, please click here.
