After months of stalemate, on December 21st, 2020, Congress passed another relief package that allocated an additional $284 billion for the Paycheck Protection Program. The Paycheck Protection Program is a forgivable loan program designed to assist small businesses in weathering the costs of the pandemic. The Small Business Administration will soon develop formal guidelines as well as forms for administration of the program. In the meantime, though, here are the general provisions, in case your business may be eligible:
- Business must have less than 300 employees
- Business must demonstrate a 25% loss in revenue for at least one quarter of 2020 when compared to the same quarter of 2019
- If a business received a loan from round one of the Paycheck Protection Program, the business must have already used the loan, or plan to use it fully
Loan Usage Requirements:
- Loan amounts will be equal to a business’ average 2019 monthly payroll cost, multiplied by 2.5
- Individual loan amounts will be capped at $2 million
- Restaurants, hotels, and other qualifying food service businesses will be able to receive loans in the amount of their average 2019 monthly payroll cost, multiplied by 3.5
- To qualify for forgiveness, at least 60% of the loan amount must be used on payroll costs
WHAT THIS MEANS FOR YOU
If you are a small business owner, independent contractor, or sole proprietor, you may have another chance to participate in the Paycheck Protection Program. While the Small Business Administration must still formalize guidance, this article should give you some idea of whether you may qualify. Several of Lincoln’s banks have extensive experience with the program, so be sure to contact your lender to get the process started immediately.
For additional information about the opportunities available to you under recent relief packages, refer to our COVID-19 Resource Page or contact the attorneys at Rembolt Ludtke LLP. We look forward to serving you!