How does the PPP loan program work?

You’ll need to spend 60\% on payroll and the rest on other qualifying expenses within 24 weeks. Qualifying expenses include utilities, rent, mortgage payments, debt payments, costs of property damage, supplier costs, protection equipment, and some operation expenses like cloud computing.

Does PPP loan need to be paid back?

Borrowers can apply for forgiveness after they have spent all of the loan money they want forgiven. For PPP loans issued after June 5, 2020, borrowers are given six months to spend the cash. They don’t have to start repaying the loan until 10 months after the spending period ends.

Who qualifies for paycheck protection program?

All Small Businesses Eligible Small businesses with 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors— are eligible. Businesses with more than 500 employees are eligible in certain industries.

Will PPP loan be forgiven?

The best part about PPP loans is that up to 100\% of the funds can be forgiven. However, you’re going to have to play by the SBA’s rules: Forgivable expenses must be spent on eligible categories and adhere to the 60/40 rule.

What can you use PPP money for?

Generally, PPP funds can be used for four purposes: payroll, mortgage interest, rent/lease, and utilities. Payroll should be the major use of the loan. The second stimulus bill also introduced four new categories of expenses that are allowed.

Are PPP loans forgivable for self-employed?

For independent contractors, sole proprietors, and other self-employed workers, you can have eight weeks of your loan proceeds automatically forgiven as salary replacement. This should amount to 75\% of your PPP loan, assuming you took the maximum amount available to you when you applied.

How do I pay a PPP loan?

The website you can use to repay your EIDL loan can be found at Pay.gov. You must have your 10-digit loan number and a payment amount in order to pay it back. There is no prepayment penalty but it is possible a minimal amount of interest has accrued from the time the loan was disbursed.

What does PPP mean for employees?

Payment Protection Program
As part of the $2 trillion aid package unveiled in the Coronavirus Aid Relief & Economic Security (CARES) Act, $349 billion was dedicated to the Payment Protection Program (PPP). This offers federal guaranteed loans to businesses with fewer than 500 employees to cover payroll and other essential costs.

Who is not eligible for the paycheck protection program?

Ineligible businesses include, among others: Business with more than 500 employees that do not meet the Small Business Administration’s employee-based size standards. Businesses currently delinquent or have defaulted on a Small Business Administration or federal agency loan in the last 7 years.

Can you go to jail for the PPP loan?

Depending on the circumstances, the federal government might charge people accused of defrauding the PPP under the following provisions: 15 U.S.C. § 645: Making a false statement to the SBA. This can result in a fine of up to $5,000 and up to 2 years in prison.