PAYCHECK PROTECTION PROGRAM REPLENISHED
Congress has infused an additional $310 Billion into the Paycheck Protection Program ("PPP") for loans to small businesses. The SBA will re-open the program at 10:30 AM EDT on Monday April 27. Most experts believe the mew round of funding will also be exhausted within a few days.
The terms and conditions of the PPP remain the same. To qualify for a paycheck protection program loan the borrower is to make a good faith self-certification that the loan is necessary because of the economic uncertainty caused by COVID-19 and will be applied to maintain payroll and make required payments. No personal guarantee or collateral is required. Small businesses (less than 500 employees or meeting the applicable SBA industry size standard), sole proprietorships, independent contractors and self-employed individuals in business on February 15, 2020 are eligible. The loan forgiveness terms and potential remain the same.
The loan can be used for payroll costs (up to a $100,000 annual compensation cap per employee), health care benefits (including paid sick or medical leave and insurance premiums), rent and mortgage obligations, utility bills and interest on debt obligations incurred prior to February 15, 2020. "Payroll costs" include wages, salary, commissions, tips, vacation and leave pay, employee separation payments, health care benefits, retirement benefits, and state or local taxes assessed on employee compensation. "Payroll costs" do not include payroll taxes, any compensation for an employee whose principal residence is outside the US, or any qualified sick or medical leave for which a credit is received under the Families First Coronavirus Relief Act.
Contact your lender.
If you submitted an application but were unable to obtain a PPP loan in the initial round before the funding ran out, you should contact your lender immediately. You may be required to re-apply, or the lender may simply re-submit your paperwork. You should confirm whether the lender has already submitted your loan to the SBA and if not, insist on a date and time when the loan will be re-submitted. Some lenders will require previous applicants to re-submit their applications, which may need to be submitted on an online form (even if the previous application was submitted on paper).
If you have further questions about the Paycheck Protection Program, please contact Scott Calhoun. You can e-mail Scott by clicking here.