In January, the Small Business Association (SBA) authorized the reopening of the Paycheck Protection Program (PPP). This fantastic news couldn’t come any sooner for small businesses. Congress authorized $284 billion in funding for the second round of PPP loans as part of a $900 billion Coronavirus stimulus package. Let’s go over the details below!
Who Can Apply?
The PPP is open to first-time applicants and businesses who previously applied and received funds. First-time applicants can be:
- Companies with 500 or fewer employees or companies with more than one location but less than 500 employees at each location
- Veteran’s organizations
- Sole proprietorships
- Independent contractors
Applying for a second PPP loan is possible as long as these guidelines are followed:
- Companies must use the entire loan for payroll costs, rent, mortgage interest, and utilities.
- Companies must have less than 300 employees.
- Companies must show at least a 25% loss in gross receipts between comparable quarters in 2019 and 2020.
PPP Loan Details
The PPP loan details are as follows:
- Interest rates are set at 1%.
- Loans issued before June 5th cover two years and those issued after June 5th are good for five years.
- Collateral or personal guarantees are not required.
- The SBA, government, or any lenders will not charge small businesses any fees.
- The deadline to apply is Wednesday, March 31st.
Can Your Loan be Forgiven?
PPP loans for both first and second-time borrowers can qualify for full loan forgiveness if they meet the following criteria during the eight to 24-week cover period after loans are dispersed:
- The borrowers’ company employee and compensation levels are sustained and must be the same compared to the period during the first PPP loan.
- Proof can be provided that funds were used for payroll costs, rent, mortgage interest, and utilities.
- At least 60% of the funds were spent on payroll costs.
Let’s do Business in Alamo!
The deadline for applying for the PPP loan is March 31st, but know that the Alamo EDC can help your small business year-round! We offer loans that can help your business get off the ground and we can also help you purchase commercial property in Alamo! Contact us today to find out how we can help you!