Payroll Protection Program FAQ
The US Treasury Department and Small Business Administration (SBA) have provided updates for the Paycheck Protection Program (PPP). Below are some frequently asked questions and their answers.

Question: When can I apply for the Payroll Protection Program?
Answer: Small businesses and sole proprietorships can apply beginning on April 3, 2020. Independent Contractors and Self Employed Individuals can apply beginning on April 10, 2020.

Question: How do I apply?
Answer:  Applications must be submitted through existing SBA lenders through their online portal for filing and processing.

Question: Is there a time limit for me to apply?
Answer: The program ends on June 30, 2020. However, it is recommended that applications be submitted well in advance as the program has a funding cap which may be reached before the program ends.

Question: What can I do to ensure my application is processed in a timely manner?
Answer: Right now, you can reach out to your existing banking relationships to (a) confirm they are processing PPP loans and (b) to be placed on their list of customers who wish to apply. We also recommend determining your company’s average monthly payroll (including health and retirement benefit costs) along with any rent, mortgage, or utility costs which may also be eligible for this program.

Questions: Are there any restrictions on what costs are eligible for the program?
Answer: Payroll costs up to $100,000 per employee (on an annualized basis) are eligible. Payroll costs (including wages and certain benefits such as health insurance and retirement) must make up 75% of the loan costs in order for it to be eligible for forgiveness.

Question: Will my loan be forgiven?
Answer: In order to be eligible for forgiveness, loan proceeds are used to cover Payroll Costs, mortgage interest, rent and utilities over the 8 week program length AND employee staffing and compensation must be maintained. In addition, payroll costs must make up 75% of the qualified expenditures for the costs. Any non-payroll costs will exceed that threshold will not be forgiven. 

Question: How to I request forgiveness of the loan?
Answer: The request for forgiveness, along with all supporting documentation, is submitted to the lender servicing the loan. The lender has 60 days from submission of the request to determine whether the loan is forgiven or not.

Question: If my loan isn’t forgiven, what are the payment terms?
Answer: Interest is calculated based on a 0.50% fixed rate. Loan matures in 2 years, with no payments for the first 6 months (interest does accrue). There is no prepayment penalty on this loan.

Question: Do the PPP loans require collateral or personal guarantees ?
Answer: No personal guarantees or collateral are required.

Please contact our office with any questions or concerns.

Questions? Please contact our office at (631)-265-6289.

The Partners of HMM, CPAs LLP: