Paycheck Protection Program

The PPP is a Loan/ Forgivable Loan administered through the SBA, Small Business Administration, and backed by the 2 Trillion CARES Act passed by Congress to help the economy because of the coronavirus

My goal is to provide basic information to help you in this crisis and links to simplify your process. The basics are this. The SBA, through your local bank, will give you a loan. The loan is 100% backed by the US Government. If the loan is used for payroll, rent, mortgage, and utilities, and you prove this, then the government will forgive the loan. It turns from a loan to a grant! The key is using it for what it is intended to do, keep paying your people, and yourself.

I AM NOT an expert at this, but I have already submitted my application. The application was the easiest I have ever filled out and will bring economic relief to AGORA and its staff.

Necessary Application Information

Below is a list of items you will need to apply. Your bank will give you a complete list of requirements. You have to go through your bank to get the loan/ forgivable loan. Our bank, Frost Bank, is only doing loans for its current customers. Some banks are doing it for others. CPA’s and lawyers can help with your application but they are NOT ALLOWED to charge you for the work under the law. The bank they work with MUST pay them for their work.

Corporate Tax Info

Most recent 990

Financial Info

Full-time and part-time pay information.

Total of payroll, rent/mortgage, and utilities monthly.

Application

The completed application.

Corporate Docs

State paperwork

IRS 501(c)3 paperwork

Articles of Incorp…

Bills

Mortgage/ Rent bills

Water Bill

Electricity Bill

SBA Information

The information below is directly from the SBA Relief website.

Loan Information

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.

Lenders may begin processing loan applications as soon as April 3, 2020. The Paycheck Protection Program will be available through June 30, 2020.

Who Can Apply

This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19.

Loan Details and Forgiveness

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). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

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%.

Forbes Magazine and Credit Approval

This information i from Forbes Magazine about credit approval.

The PPP is the piece I am personally most optimistic about. Virtually every small business in America will be able to qualify. There are only two qualifications: have fewer than 500 employees and have been in business before February 15th, 2020.

How much businesses will qualify for depends on one thing: payroll. Take the average monthly payroll expense from 2019 and multiply it by 2.5—that’s it. Note that payroll does include all types of compensation including salaries, wages, commissions, healthcare and insurance premiums. The only thing that can’t be included is payroll costs over $100,000. So if you have an employee making more than that, you can only calculate up to $100,000 of their salary ($8,333.33).