The Paycheck Protection Program: Aid For Small Businesses During Coronavirus Pandemic

The PPP was designed to provide immediate relief to small businesses struggling during the coronavirus pandemic with $350 billion to help cover payroll and keep workers employed. Under this program, businesses with 500 employees or less can qualify for low-interest loans or grants to help fund payroll costs. Almost all small businesses can apply for these relief benefits, with the exception of political organizations and religious institutions.

This program is retroactive to February 15, 2020, in hopes that some small businesses will be able to bring back workers who were already laid off. PPP loans are available through June 30, 2020.

The federally-guaranteed loans that are part of the PPP provide employers with cash-flow for payroll costs during this emergency. According to Senator Rosen’s office, the loans will be forgiven if employers maintain their payroll. This is all in an effort to keep workers employed and to keep small businesses in a position to bounce back quickly once the economy reopens. Up to 8 weeks of payroll is forgiven based on employee retention and salary levels.All current SBA 7(a) lenders are eligible lenders under the Paycheck Protection Program.

As part of the PPP, Senator Rosen and others pushed the Emergency Economic Injury Grant program for small businesses. This grant is the first of its kind and does not need to be paid back. If your small business qualifies for the Emergency Economic Injury Grant, you can receive up to $10,000 in cash for business expenses related to payroll costs.

What Are Eligible Payroll Costs Under the PPP?

The following costs are eligible for economic assistance under the PPP:

• Salary and Wages
• Payment for Vacation and Parental, Family, Medical or Sick Leave
• Payment of Retirement Benefits
• Payment of Group Health Care Benefits
• Payment of State or Local Tax Assessed on Employee Compensation
• Allowance for Dismissal or Separation

Employee or owner compensation that exceeds $100,000 is not eligible under the PPP. Also, if employees reside outside of the United States, their compensation is not covered through this program.