On April 2nd, 2020 the treasury issued final guidance on the SBA Payroll Protection Program (PPP). Here is a summary of the program. Please note, this is subject to change as all coronavirus information is coming out quickly. Consult your financial institution for their terms.

https://home.treasury.gov/system/files/136/PPP--IFRN%20FINAL.pdf

Loan Amount: 2.5 times "aggregate payroll costs" or $10,000,000, whichever is lower

How is Aggregate Payroll calculated? Salaries, wages, cash tips, commissions of employees (limited to $100,000/year for an employee), plus employer provided group health insurance, employer provided retirement benefits, and state and local taxes assessed on wages. All of the wages for a 12 month period are added up and then divided by 12, and then times by 2.5 to arrive at the loan amount.

What time period do you use for 12 month calculation? Depends upon the bank, but most are allowing either for 2019 or April 1, 2019 to March 31, 2020. For seasonable employees, you can use February 15, 2019 - June 30, 2019. For new employers, you can January 1, 2020 to February 29, 2020.

Interest Rate: 1%

Payback: First payment due in 6 months, entire loan due in 2 years. 

Forgiveness: For the 8 weeks following the receiving of the loan, if you use the loan for payroll costs, group health benefits, mortgage interest payments (not principal or prepayment), rent (on leases before 2/15), and utilities (under service agreements before 2/15). At least 75% of the payments have to be related to payroll costs. The number of full time equivalents must also be maintained.

Can you apply for more than one PPP Loan? No

Do Independent Contractors count as payroll? No

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