Paycheck Protection Program (USA)

[HitRed]

If you are a business owner pay attention. This is a great deal. Almost phenomenal. Almost scary good. If your HR or Accounting Department hasn't started checking into this reorient their focus quickly.

Look at these details!

All small businesses are eligible
The loan has a maturity rate of 2 years and an interest rate of 0.5%
No need to make loan payments for the first six months
No collateral or personal guarantees required
No fees
The loan covers expenses dating back to February 15, to June 30 2020
The loan can be forgiven and essentially turn into a non-taxable grant!!!

This allows you to keep employees on the payroll even if they are not working (so you don't loose them). Any $$$ that accounts as payroll will not have to be repaid is my understanding.

The funds can be used for:

Payroll and commission payments
Group health care benefits/insurance premiums;
Mortgage interest payments
Rent and lease payments
Utilities
Interest on any other debt obligations that were incurred before the covered period.

Read for yourself!
https://bench.co/blog/operations/payche ... n-program/

HitRed

[mrswdk]

I was about to shit on the fact it's a loan until I saw the bit that says:

In the 8 weeks following your loan signing date, all expenses related to the following can be forgiven:

[list=][*]Payroll—salary, wage, vacation, parental, family, medical, or sick leave, health benefits
[*]Mortgage interest—as long as the mortgage was signed before February 15, 2020
[*]Rent—as long as the lease agreement was in effect before February 15, 2020
[*]Utilities—as long as service began before February 15, 2020[/list]

So for those costs it's not actually a loan, it's a grant.

Is there no cap? e.g. if you have an employee earning $100,000 per month, can you use this money to pay their full salary each month then get the entirety of that forgiven?

[HitRed]

Take your last monthly payroll and multiply by 2.5. This gives you 2 months payroll AND .5 for extra expenses.

At the end of 8 weeks you will be audited. Any $ spending on payroll, rent, interest and other covered items is removed from the loan. This amount is FREE. You just pay the balance.

Any employee with a salary OVER $100,000 for the year (Saxi) is treated as max $100,000. For this instance the 2 months would be $16,666.67.

I'm rushing through this and still learning.

HitRed

[mrswdk]

Pretty generous cap tbh.

jimboston will be livid at the federal government interfering in people's lives like this though.

[KoolBak]

IMO, being a VERY small biz, the disaster loan program is much better. I spose if I had a bunch of employees and leased my operating space, this would appeal.

It is SBA backed. Guaranty you there is very little chance of abusing the program (in my previous life as a commercial lender, I was the top SBA lender to small biz in the NW....SBA lending is stringent).

Hope that's still the case...assuming it is.