The Paycheck Protection Program, or PPP, is a loan for businesses. The business can either be for profit or not for profit, and it has to meet the size requirements of the Small Business Administration. In order to qualify for the loan, the business must have been operational as of February 15, 2020, with no more than 500 employees. All of the employees do not have to be full-time workers. Sole proprietors, independent contractors, and some who are self-employed also qualify for the loan. One reason why a business is not eligible for the loan is if an owner of at least twenty percent of the equity is currently incarcerated. You must submit the following documents with your application tax return:
- One year of payroll reports
- If there were any independent contractors in 2019, then each of their 1099’s
- A record of health insurance paid by the employer, and
- A record of the total retirement funding.
The loan is capped at ten million dollars. You can take out 2.5 times your average monthly payroll costs. The term of the loan is two years, and the interest is 1%, and all payments are deferred for six months. The loan can be used for payroll, which includes wages, retirement benefits, sick leave, etc., and it can be used to pay health insurance costs, mortgage payments, rent payments, and utilities.
The loan can be forgiven for the total amount that is used for the eight weeks after the loan is granted. You must apply for the loan to be forgiven and submit documentation for what you used the money for, like payroll, utilities, rent, etc. The loan will not be forgiven in its entirety if there are fewer employees or a decrease in salary by more than 25%. If you have any questions regarding the PPP loan, then you can contact Jayson Lutzky. Jayson Lutzky is an attorney who gives free consultations and can be reached at 718-329-9500. He has been practicing law for over 36 years, and he can help you with your legal matter. Due to COVID-19, he is available by telephone or by Zoom Monday to Friday from 9am to 4pm. Regular business hours are Monday to Friday from 9am to 5pm, with the last appointment at 4pm, and Saturday, from 10am to 2pm, with the last appointment at 1pm.