This article is written by Matt Nelson, Founder and President of AllAuctionSales.com.
Recently in the news, the government announced it would be providing funding for SBA PPP loans. As a business owner, if you have not yet applied for a PPP loan, I strongly urge you to call your local banker as soon as you can. Many people predict the funding for this program will run out as early as Monday, 05/04.
According to the SBA, “The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.”
Most businesses that apply will receive a loan for 2.5 times their average monthly wages. This loan will be a 24-month loan at 1.00% with no payments for 6 months. However, the big advantage to this program is the opportunity of having most or all the loan forgiven. Essentially, if you keep your employees on the payroll for the 8-week period after you receive your loan, the money you paid for those employees will be forgiven.
The application is quite easy to fill out. Plus, you can use some of the expenses related to rent, mortgage interest or utilities to help qualify for more forgiveness. Your banker will assist you through that process, though. It will be helpful to have your 2019 quarterly 941’s available for your banker, as well. If you file your Schedule C, your banker will need a copy – even if you have not filed.
In summary, if you have not applied for a PPP loan please call your banker right away.
This is a very simple explanation of the program and AllAuctionSales.com and its employees are not responsible for any errors or omissions.