What is a PPP Loan?

Loans can be for 2.5 times payroll costs, up to $10 million, feature a streamlined application process, require no collateral, and most significantly, can be forgiven.

Can You Qualify for the PPP Loan?

Any small business with 500 or fewer employees may be eligible. This includes small businesses, S corporations, C corporations, LLCs, private nonprofits, faith-based organizations, tribal groups, and veteran groups. Self-employed individuals who file an IRS Schedule C with their Form 1040, such as independent contractors and sole proprietors, are also eligible. Restaurants and hospitality businesses may qualify if they have 500 or fewer employees per location.

Those that don’t qualify are those engaged in illegal activities, owners more than 60 days delinquent on child support obligations, farms and ranches, sex businesses, lobbyists, and gambling establishments.

How does PPP Loan Work?

The government’s efforts to help businesses have resulted in generous terms for PPP loans. Borrowers can receive two and a half times their average monthly payroll costs (excluding compensation in excess of $100,000 per employee) incurred 12 months before the date the loan is made (some lenders are simply using 2019 numbers). For example, if your monthly average payroll (excluding compensati excess of $100,000 salaries) in the last 12 months is $10,000, you may borrow up to $25,000. Additionally, you can include as payroll costs: payment for vacation, parental, family, medical and sick leave (that is not covered by another emergency loan/grant); payment for dismissal or separation; payment for group health care coverage, including insurance premiums; payment for retirement benefits and payment of state and local taxes assessed on employees’ compensation for More Information feel Free Email Us.