The purpose of this new Paycheck Protection Program (PPP) and Loan Forgiveness is to keep the U.S. economy going through the COVID-19 pandemic. It is designed to help small businesses cover ongoing operations in the near term and strengthen them to retain employees.
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UnderCARESAct, ThePaycheckProtectionProgram (PPP) provides$349billionofloanfundsto keep
theU.S. economygoingthroughtheCOVID-19pandemicperiod.
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The Paycheck Protection Program(PPP) is designed tohelp
small businesses cover ongoing operations in the near term and
encourage them to retain employees.
Under PPP, the eligible expenses include funds topay
employees, interest on mortgageobligations, insurance, rent,
leaves, utilities, andpayrollrelated costs incurred from
February 15, 2020 toJune 30, 2020.
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ProvideaidtocompaniestokeepAmericanworkers
paidduringthecovid19pandemic
Lowering unemployment in the country
Reducingfinancialstressonsmallbusinesses.
Ensuring businesses are adequately funded so
they can reopen when the COVID-19 period is
over.
PRIMARY
GOALS
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5. Where to UsePPPLoanFund?
Compensationtoemployees. AllCostsofemployeesPayroll.
Costsrelatedtothe continuationofgrouphealth
carebenefitsofemployees
Businessrelatedmortgageinterestpayments,lease
payments,utilitypayments.
Interest on anyother business debt obligations
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6. PaycheckProtection Program– LoanForgiveness
Aunique factor ofPaycheckProtection Program Loan is
that they will be grantedloan forgiveness if the money is
spent on government-approved expenses.
The loan forgiveness amount includes everything you spend
on allowable expenses over an eight week time period after
the loan is made andEmployee andcompensation levels are
maintained.
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7. PPPLoanForgiveness Conditions
Forgivenessamount maynotexceedthe principalamount and
accruedinterestofthe loan.
If the PPPLoan isusedforanyotherpurposeswillNOT be
forgiven.
Any cancelledindebtednesswillnotbe includedinthe
borrower’staxable income.
Duetohighsubscription,itisanticipatedthat notmorethan
25% oftheforgivenamount maybe fornon-payrollcosts.
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8. PPPLoanForgiveness Conditions (continued)
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PPP loanforgivenesswill bereducedifyoudecreaseyourfull-
time employeeheadcount.
The Amount ofloanforgivenesswill alsobereducedifyou
decreasesalariesand wagesby morethan25% forany employee
that madelessthan$100,000 annualized inthe previousyear.
It iscompulsorytorestore(until June 30,2020) full-time
employmentand salarylevelsforany changesmadebetween
February15, 2020 and April26,2020.