The purpose of the Paycheck Protection Program is to help you retain your employees, at their current base pay. If you keep all of your employees, the entirety of the loan will be forgiven. If you still lay off employees, the forgiveness will be reduced by the percent decrease in the number of employees.
How does Paycheck Protection Program work?
The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.
What does the Paycheck Protection Program cover?
The Paycheck Protection Program (PPP) provides forgivable loans to small businesses to help cover up to 24 weeks of payroll costs and qualifying non-payroll costs. PPP is a small business relief measure that incentivizes businesses to retain employees on payroll.
Do you have to pay back payment protection program?
Yes. PPP loans (the full principal amount and any accrued interest) may be fully forgiven, meaning they do not have to be repaid. If you do not apply for forgiveness, you will have to repay the loan.
How much money do you get from Paycheck Protection Program?
How much PPP funding can I receive? The maximum amount you can receive from your SBA-approved lender is your monthly average payroll cost in 2019, 2020, or the one year period before the application. Multiply it by 2.5, up to a maximum of $2 million.
Is the paycheck protection program free money?
Initially, most business owners probably think that of course they’ll apply for a PPP loan. It’s free money if you qualify for forgiveness, after all.
How is paycheck protection loan forgiven?
You must use at least 60% of the loan proceeds for payroll expenses in order for the loan to be forgiven. In addition, you must not have reduced your payroll for 24 weeks from the time you received the loan funds. … In addition to the number of employees, you’ll need to provide your payroll costs for the covered period.
Is the paycheck protection program still open?
The Paycheck Protection Program (PPP) ended on May 31, 2021. Existing borrowers may be eligible for PPP loan forgiveness. SBA also offers additional COVID-19 relief.
What are eligible expenses for PPP loan forgiveness?
Business expenses on electricity, gas, water, transportation, telephone, or internet access are eligible uses of PPP funds and qualifies for forgiveness.
Can I go to jail for getting a PPP loan?
If the lie on your PPP loan is counted as deceiving a financial institution to profit, then you can be charged with bank fraud under U.S. Code Title 18 U.S.C. 1344. … Typically, for an individual facing a misdemeanor for this crime, the bank fraud punishment can be up to one year in jail and up to $4000 in fines.
What happens if I don’t pay my PPP loan back?
Defaulting on your PPP loan will likely prompt the federal government to report your business to credit scoring companies, meaning your personal and business credit is likely to take a substantial hit.