How To Apply for the Paycheck Protection Program During Covid 19

Do you know how to apply for the Paycheck Protection Program? If not, keep reading as we explore this topic. As we all already know, 2020 has proven to be a difficult year for many reasons. People’s health, career, businesses, and financial stability have all been on the line and continue to be on the line as the various states reach their own peaks and valleys in coronavirus cases. Luckily, the SBA or Small Business Association recognized this quite earlier on and began to offer multiple Coronavirus Relief Options for small businesses, including the Economic Injury Disaster Loan Program (EIDL Program) and the Paycheck Protection Program (PPP). Today we’ll be discussing the latter.

While the Paycheck Protection Program officially closed on August 8 of 2020, this doesn’t mean this isn’t a topic you shouldn’t still educate yourself on. As we all already know, the conditions of the coronavirus and its effect on each individual state and our country as a whole is always changing. It’s quite possible the PPP could reopen again. Especially considering that the EIDL stopped accepting applications, and then reopened the program again on June 15. So, even though the Small Business Association is no longer currently accepting applications for the PPP, there’s no reason not to stay informed on this loan and check back periodically to see if the program has been reinstated (https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program). Additionally, it’s important to know, that some lenders are still accepting PPP applications in anticipation that funding will be reinstated again. So there’s no reason not to check the lender list for your state (below), call around to various lenders and see where they currently stand with the PPP. Because who knows? Maybe you will find that you’re eligible to apply now after all and will be one of the first businesses to receive the loan upon funds being located.

   Basically, the PPP was instated as a way to help small businesses keep employees on their payroll. Even though many businesses had to physically close their doors and likely saw a large cut in revenue, the PPP was meant to give peace of mind to small business owners and their employees that even if they couldn’t afford to continue to pay their workers out of pocket, they could still get paid via the PPP.

The PPP is technically considered to be a “loan,” however, if small businesses met the proper guidelines of employee retention criteria and fund usage (at least 60% of the given funds must be used for payroll, and the remaining amount may be used for rent, interest on mortgages, and/or utilities), then the loan would be forgiven.

The terms of the PPP loan are as follows: 1% interest rate, six months of deferred payments, loans reach maturity in 2 years for those issued prior to June 5 and 5 years for those issued after, no personal guarantees or collateral need, and no additional fees. Additionally, the amount of the loan can be recalculated and reduced if the number of employees on payroll decreases or if their pay decreases.

Should the PPP get reinstated, you can apply for it at anyone of the federally approved financial institutions found here: https://www.sba.gov/document/support-paycheck-protection-program-participating-lenders. This list is quite extensive and is organized by state.

Overall, we hope your small business finds the help it needs during these trying times. Luckily, the EIDL or Economic Injury Disaster Loan Program is still accepting applications, and you can read all about it in the piece we wrote on it here. Best of luck, and remember, “this too shall pass.”

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