Trying to maintain “business as usual” is becoming a challenge for small businesses as the COVID-19 crisis continues. This is especially true as businesses try to cover payroll expenses.
The United States Small Business Administration (SBA) is offering the Paycheck Protection Program as assistance in the form of loans, available through June 30. The loan program is designed to assist small businesses to keep employees on the payroll. It’s forgiven only if all employees are kept on the payroll for eight weeks, and the loan is used for payroll, rent, mortgage interest, or utilities.
Any small business concern that meets the SBA’s size standards is eligible to apply. Businesses with 500 or fewer employees in the U.S. are eligible, if they’re principally located in the U.S. Nonprofits such as a 501(c)(3), veterans organizations 501(c)(19), or Tribal Business concerns sec. 31 (b)(2)(C) with 500 or fewer employees are also eligible. If they have more than 500 employees, they must meet the SBA industry size standard.
Other qualifying individuals may include sole proprietors, independent contractors, and self-employed persons. Payments will be deferred for six months and only forgivable if the funds, again, are used for payroll costs, interest on mortgages, rent, and utilities.
According to the SBA, forgiveness is based on the employer maintaining - or quickly rehiring - employees, and maintaining salaries. The loan has a maturity of two years, and an interest rate of 1%.
