The following is most fitting for an Employer who has been displaced!
The Care Act was signed into law on Friday, March 27, 2020 and includes a provision for Employers to extend workers pay and possibly NOT REPAY!
The “PPP” Paycheck Protection Plan
BREAK IN: Some legislatures are expecting this to be over subscribed i.e. Run out of money – do not hesitate!
BREAK IN: Your local bank will likely be able to accept an application TOMORROW, FRIDAY APRIL 3!
Here is a link to a sample application on the SBA website, and Here is a link to the form saved here on our blog in case the site is down.
Forgiveness loan that can be totally FREE to small business owners if they qualify and use the funds appropriately. If not, they will receive a possible 10 year term, 4% maximum interest rate from the Small Business Association, happily administered by qualified local banks in an attempt to speed the process of getting the loans to business owners.
The purpose of this loan is too keep your people employed!
Available for business owners of less than 500 people who were or have been adversely affected by the Corona Virus.
Must certify Good Faith that the business has been affected by the Virus. Which can include uncertainty of the future.
Must be applied for by June 30, 2020!
Repayments will not commence until at least six months and no longer than twelve months.
Loan amount is the lesser of $10 mllion or 2.5 times your average monthly payroll in 2019 – EXCLUDING AMOUNTS OVER $100K ANNUALLY
IF the entire loan is used completely within eight weeks and is used for any of the following:
- Payroll costs
- Group health insurance premiums and other healthcare costs
- Salaries and/or commissions
- Mortgage interest (excluding amounts pre-paid)
- Other business interest incurred prior to February 15, 2020
It may be completely forgiven (NO TAXES IN ANY WAY OR PAY BACK) if the employer meets the following employee limits:
- The business must maintain the same number of employees (equivalents) from February 15, 2020 through June 30, 2020 as it did during either the same period in 2019 or
- from January 1, 2020 until February 15, 2020. To the extent this requirement is not met, the amount eligible for forgiveness will be reduced, ratably.
You may not cut any employees <$100k annually by more than 25% or they will not count towards the above headcount.
Have a Great “Payroll Protection Plan” Day!
John A. Kvale CFA, CFP