Q: Heard that my company can get a brand new Paycheck Safety Program (PPP) mortgage. When can I get it? How a lot can that be? What are the situations for forgiveness? What different particulars do I have to know?
A: The Legislation on Economic Assist for Small Companies, Nonprofits and Arduous-Affected Locations, signed by the President on December 27, gives $ 259 billion for brand new PPP loans, of which $ 25 billion is earmarked companies with a most of 10 staff or situated in low to average earnings neighborhoods. You probably have already acquired a PPP mortgage, you’ll be able to reapply, so long as you certify that you’ve used your complete first mortgage.
The utmost quantity you may get is identical as final time: as much as 2.5 instances your common month-to-month payroll in 2019, as much as $ 2 million. Self-employed staff and sole proprietorships with no staff proceed to be capped at $ 20,833.
Should you get a brand new mortgage, it’ll seemingly last more than within the spring, for the reason that payroll is already a lot decrease than it was in 2019. You may have as much as 24 weeks for all the pieces. spend. You may then have as much as 10 months to say sorry.
You shouldn’t have greater than 300 staff (in comparison with 500 beforehand). New is that you need to reveal a discount of at the very least 25% in gross income in any quarter of 2020 in comparison with the identical quarter in 2019, or an annual discount of 25%. For journey companies of every kind, this will probably be simple to show.
The opposite new subject is that you would be able to spend cash on extra sorts of bills whereas nonetheless being eligible for forgiveness. Along with payroll, lease, mortgage curiosity, and utilities, now you can spend the mortgage on different operational bills, together with software program, some vendor prices required by contracts, and spending on employee safety and different adaptive prices of Covid-19, resembling the price of reconfiguring your social distancing workplace.
In case your mortgage is just not 100% canceled, the compensation phrases embrace 1% uncompound curiosity with 5 years to pay, with no private assure.
The brand new regulation required the Small Enterprise Administration (SBA) to subject new rules inside 10 days of the regulation coming into drive, and the SBA simply met the deadline. You may view the 42-page doc right here.
Debtors and potential lenders will undoubtedly have tons of of questions, so we will count on the SBA to subject an FAQ doc inside the subsequent week or two.
Banks and different lenders will seemingly need to wait till then earlier than accepting new PPP functions, so it’ll seemingly take a number of weeks earlier than you’ll be able to apply for a brand new mortgage. You don't have to go to the identical lender that you simply used for the primary mortgage.
The final day to use for and obtain a brand new PPP mortgage is March 31, but when the story is a information, funds will run out earlier than that date, so apply as quickly as doable.