By Jay L. Morse
The Paycheck Protection Program (PPP) provides for the Small Business Administration (SBA) to guarantee 100% of loans issued to small businesses through December 31, 2020. This means that the loan money can be completely forgiven, depending on how the funds are used. Individual lenders will determine eligibility; however, generally a business is eligible if it employs 500 employees or less (not including independent contractors) and was in business on February 15, 2020. A total of $349 billion was allocated to help small businesses keep workers employed, but currently the SBA is not accepting further applications as the initial funding has run out. An additional round of funding is expected soon . If so, eligible entities should plan on applying as soon as the additional funds are authorized.
These loans are available on a first come, first serve served basis. If a borrower files a loan application based on outdated loan guidelines, no action need be taken based on updated guidance. However, borrowers that submitted loan applications that are still not processed by the lender may revise their applications based on clarifications reflected in updated guidelines, including Frequently Asked Questions from the Treasury Department or the Small Business Administration.
Do not hesitate to ask for more information about how much loan funding a business can obtain and how to comply with guidelines regarding loan forgiveness.