Paycheck Protection Program Loans Available Through Coronavirus Stimulus Bill
We got a knack at this; the coronavirus outbreak has made businesses nearly eschew as the persistent conditions were not favorable and compelled companies to land for a disastrous turn. But as we are acquainted with a famous proverb; all well when the end is well. Sometimes the business conditions gain an indestructible approach, but in the future, what has been dragging in your business, you must deal with the fuss.
It is evidently seen that businesses have faced a downright drastic downfall amidst the Covid-19 situation. You must deal with it no matter what, but the questions arise how it is possible? Lately, the businesses have stooped so low, witnessing the downfall of conditions the U.S. government has approved a large stimulus funding package commonly known as the Coronavirus Aid, Relief, and Economic Security aka the CARES Act.
The Paycheck Protection Program Loans are shepherd specifically for small businesses; the loan amount is federally backed loans for ailing small businesses to continue the operations.
How the Paycheck Protection Program Loan Differs from Other Loans?
A significant segment of the CARES Act is dedicated to supporting business operations and encouraging organizations to keep their employees employed. It is the Paycheck Protection Program (PPP).
Paycheck Protection Program Loans are an Expansion of the SBA’s 7(a) Loan Program
The Paycheck Protection Program loans are forged up, keeping in view the persistent Covid-19 wave, but it is worthwhile to mention that these loans are an expansion of the SBA’s 7(a) loan program.
This loan program entails a flexible policy; it means if you acknowledge the pre-defined rules then your company might be considered for the exemption of loans. No need to fraught with the prevailing conditions of your business.
What is the Purpose of These Loans?
Paycheck Protection Program is a stumbling block for your businesses to encourage the owners to retain their employees on their payroll and continue normal business operations despite the ongoing economic circumstances.
The lenders direct the respective companies to avail the loan funds for payroll costs, mortgage interest, rent payments, office utilities, and other eligible business expenses. Suppose the companies abide by the mentioned rules then the loan can be compensated and cap you eligible for forgiveness criteria as per the USA small business administration laws.
Before taking off for an in-depth comprehensive and up-to-date guide on the Paycheck Protection Program, let us have a quick Q/A and acquire the basics first.
Why is the Paycheck Protection Program Initiated?
The Paycheck Protection Program has emanated as a relief program comprised of federally guaranteed loans through the U.S. Small Business Administration (SBA) for the organizations which are severely affected by COVID-19.
Who counts as an employee in your organization?
A lot of questions have been bombarded and it is utterly significant to answer them in a straightforward way.
Suppose your organization’s hiring has surged employees on full-time, part-time, or remote-based working if they hold a place in your organization. In that case, the individuals are considered the employees of your company. So, all the employees are rolled in and counted as your employees.
What is the Amount of the Paycheck Protection Program Loans?
You must be inquisitive about the loan amount offered by Paycheck Protection Program, let us break the ice and get to know about the loan amount, for most organizations, either of the following points will limit your maximum loan amount to whichever of them is less:
● The average total of monthly payroll costs for one year X 2.5
● $10 million
If you run a seasonal business, then the maximum loan amount will be the average total monthly payroll costs for any 12 weeks. You can choose the beginning date of your 12-week period.
If your organization has availed the loan once, will it qualify for another one?
You can surely apply for it if you meet the qualifications, for the second round of applications these loans are termed as the “second draw” loans.
What is a Paycheck Protection Program Loan?
The Paycheck Protection Program is a fully-fledged loan program that originated from the CARES Act. This was originally a $350-billion program intended to provide American small businesses with eight weeks of cash-flow assistance through federally guaranteed loans.
How can the Paycheck Protection Program Loan be utilized?
At least 60 percent of the loan must be utilized to fund payroll and employee benefits costs. The remaining 40 percent constitutes Mortgage interest payments, utilities, rent, and lease payments, operations expenditures such as software and accounting needs, and property damage costs due to public conflicts not covered by insurance.
What are Payroll Costs?
The following are considered as the payroll costs, other than the mentioned conditions would be decluttered during the application:
● Commissions or bonuses
● Cash tips
● Payments for vacation, family, or medical leaves
● Allowances for dismissals
● Employer payments for employee benefits for instance health insurance
● Employer-paid retirement benefits
● Local taxes imposed on employee compensation
Financial Documentation for Paycheck Protection Program Loan
You will be acquiring the following documents to secure Paycheck Protection Program Loan:
● Payroll processor records
● Payroll tax filings
● Payroll tax forms from 2019 (Forms 941, 940, and W-3)
● Form 1099-MISC record
● Schedule C for a sole proprietorship
Qualifications for Paycheck Protection Program Loan
● In Operation since February 15, 2020
● Has not previously availed a PPP loan (from BitX Funding)
● Has no more than 500 employees
BitX Funding is the online marketplace for small business owners looking to fund a project. We specialize in connecting small business owners with lenders who will compete for your business. We believe small business owners drive the economy and we are passionate about helping your company reach its full potential.
You can reach a loan specialist toll-free at 1-800-824-2407, or email at email@example.com, or apply online here and we can guide you on which loans are the best fit for your business.