by Blair Butters | Jul 24, 2020 | Uncategorized
It’s no secret that the coronavirus has substantially impacted our economy. If you’re a business owner, chances are you applied for one of the business relief programs that were made available as part of the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), a $2 trillion stimulus package that went into effect on March 27, 2020. One of the temporary programs of the stimulus package was the Paycheck Protection Program (PPP) loan. Though the PPP loan application deadline has been extended to August 8, 2020, the businesses that applied for the loan in April and May are now turning their attention to the Loan Forgiveness application. So, what exactly is the PPP loan and what do you need to know about the forgiveness application process? What is the Paycheck Protection Program Loan? At its foundation, the PPP loan was created with one simple set of rules: businesses who qualified to receive the loan have 8 weeks to spend the loan proceeds on payroll and state payroll taxes and certain non-payroll expenses, which include rent, utilities, and mortgage interest (if applicable), with a maximum spend of 25% on the non-payroll items. However, as part of the PPP Flexibility Act, the SBA added in a 24-week option and gave businesses a little more flexibility by allowing them to spend up to 40% on the specified non-payroll expenses during that time. At the end of the 8 (or 24) week period, the business may have some or all of the loan forgiven depending on how the money was spent and whether the number of full-time equivalent employees changed as compared to...
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