Here's everything you need to know about the Paycheck Protection Program:
Costs of benefits including vacation, parental, family, medical and sick leavePayments for retirement benefitsSole proprietors and independent contractors are also eligible to be included in payroll costs. Their wages, commissions, income or net earnings from self-employment can be covered by loan funds, capped at $100,000 per year for each worker.
If a small business uses a Paycheck Protection Program loan for the specified expenses over an eight-week period, the loan will be forgiven. Mortgage interest, rent and utility payments are also eligible for payment with the loan funds .Loans granted under the Paycheck Protection Program will be forgiven in full — essentially making them grants from the government — only if certain requirements are met.
Loan forgiveness will be reduced depending on how businesses use the money. If staff counts are reduced, or salaries for employees who earn less than $100,000 annually are reduced by more than 25%, then the business must repay the loan. Businesses have until June 30, 2020 to restore full-time employment and salary levels that were changed between February 15 and April 26.
Businesses will need to submit a request for forgiveness to the lender that services their loan. According to the Treasury, the request must include documents verifying employees and pay rates, as well as what the loan money was used for. Small business owners can apply through an existing U.S. Small Business Administration lender or through any federally insured deposit institution.
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