The Small Business Administration opened the applications for the Paycheck Protection Program. From May 15h and on small business owners can make their application for the PPP. Its main aim is to help small business owners stay afloat during the coronavirus crisis. Those who are eligible and also affected by the pandemic can apply.
If your business size meets the Small Business Administration’s size standards, you can apply for the PPP. This means you have a business with a greater of 500 employees or your business meets the SBA’s industry size standard. On top of this, self-employed individuals, independent contractors, and sole proprietors are eligible as well.
PPP Loan Forgiveness
The Paycheck Protection Program actually includes more than just payroll. When you submit your application and get your loan, the money borrowed is going to be spent on payroll for the next 8 weeks. However, during this time, rent, utilities, and mortgage interest can be forgiven. That is, of course, assuming you are eligible for forgiveness.
It isn’t finished there though. Any canceled debt is normally considered as taxable income. With the CARES (Coronavirus Aid, Relief, and Economic Security) Act, Paycheck Protection Program loan is made tax-free. This means you’re not going to pay a single dime in taxes for any cancellation of debt for the above.
Applying for Loan Forgiveness
Keep in mind you must apply for the loan forgiveness. The whole application is 11 pages long. The application includes important information you need to provide on the application form such as
- PPP Loan Amount
- PPP Loan Disbursement Date
- Employees at Time of Loan Application
- Employees at Time of Forgiveness Application
- Economic Injury Disaster Loan Advance Amount
- Economic Injury Disaster Loan Application Number
- Payroll Schedule
- Covered Period(s)
- Alternative Payroll Covered Period (if applicable)
If you have a company accountant, he or she can provide every information necessary on the application form or you can do it yourself as the business owner. Once you start filling the application form, make sure there are no missing parts. Since most boxes are connected to each other, one error can result in filling another application for the Paycheck Protection Program.