Payroll Protection Program: What You Need to Know

On April 24, President Trump signed a bill into law that would allocate an additional $310 billion to the Small Business Administrations’ (SBA) Payroll Protection Program (PPP). The initial $350 billion of funding was depleted quickly, as businesses were approved for relief funds across the nation.
 
With the new funding comes a new set of guidelines from the SBA that aim to prevent large publicly-traded companies from accessing the funds, as they did in the first round. Under the new guidance, large public companies who tapped the PPP before the rule change from the SBA can avoid scrutiny by returning the relief loans in two weeks.
 
For businesses still seeking aid under the PPP loan program, here’s what you need to know:

• If you have not yet reviewed your businesses’ eligibility, it’s important that you do so before applying. Review information provided by The U.S. Department of the Treasury with oversight from your internal counsel or legal representation.
• While many banks only worked with customers during the first round of funding, some have opened up applications to non-customers. A list of lenders and their requirements is available here. A full list of SBA lenders can also be found here. 
• If you have not yet applied, do so as soon as possible with all of the required documentation, as funding will go quickly.
• If you submitted your application to a lender prior to the initial funds running out, confirm that all required documentation has been received and reviewed by the lender.
• If your application was approved after the funding ran out, your lender should notify you of your application status. If you have not heard from your lender regarding the status, confirm with them as soon as possible.

• The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll).
• Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.  Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
• This loan has a maturity of 2 years and an interest rate of 1%. Loan payments will also be deferred for six months.

The Tampa Bay Business Journal has also offered guidance on how to ensure loan forgiveness. For a more robust breakdown, visit the SBA’s Payroll Protection Program website.