How to Get a Paycheck Protection Program (PPP) Loan

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The COVID-19 pandemic has taken an unfathomable toll on the entire globe, with enormous amounts of human suffering, death and destruction. As the pandemic raced around the world and governments responded with lockdowns and other restrictions, business owners suffered too, with shuttered stores, closed restaurants and disruptions in the way they served their customers.

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Few businesses will emerge from the worldwide epidemic unscathed, and that is why the United States government has responded with new programs, including the Paycheck Protection Program, or PPP. This government funded program offers access to billions of dollars in cash loans to struggling businesses, and if firms follow the rules those loans can be forgiven, creating a cash infusion for the firms involved.

If your business has been struggling, it is important to apply for the PPP loans you are eligible for, but there has been a lot of confusion about how to apply, what kinds of documentation are needed and how to eventually get the loans forgiven. Here are some key things you need to know about applying for a Paycheck Protection Program (PPP) loan.

Does Your Business Qualify for a PPP Loan?
The good news is most businesses will qualify for a Paycheck Protection Program loan. Even if you do not have any employees, you may qualify under the provisions that provide government loans to gig workers, self-employed individuals and others who operate solo endeavors.

Whether you have any employees or not, the amount you receive will be equal to 2.5 times your monthly payroll costs, providing a lifeline to struggling firms and allowing them to stick around until after the pandemic is over. If you are self-employed, this 2.5 times payroll calculation can be based on the amount you pay yourself. As long as you keep good records in your business, you should have no trouble qualifying for a PPP loan.

You should qualify for a PPP loan if your business employs 500 or fewer people. The structure of your business does not matter – S corporations, C corporations and self proprietorships are equally eligible for the governmental assistance. If you think you qualify for a PPP loan, you should contact your bank right away. Not all banks participate in the program, so it will be important to find out if the institution you use can help guide you through the process.

How Can the Loan Be Forgiven?
The exact mechanism for forgiving PPP loans is somewhat of a moving target, with shifting rules and differing amounts of documentation. For small firms who received relatively modest amounts of money, the process of forgiveness could be as simple as signing a statement attesting to the fact that the money was used to cover payroll and other allowable expenses.

The documentation required for forgiveness of larger loans is more complicated, but the loan officer at your bank should be able to help you complete the required forms. You should not let fears about getting forgiveness dissuade you from getting the money you qualify for under the PPP program.

Even with vaccinations underway and herd immunity on the horizon, the ongoing COVID-19 pandemic is still wreaking havoc and taking a heavy toll on patients and their families. As businesses continue to struggle, PPP loans are available to lighten the load and lessen the burden. If your business qualifies for a Paycheck Protection loan, the money you receive could help you stick around long enough to see the end of a very tough couple of years.

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