The U.S. Department of the Treasury has released the details of the Paycheck Protection Program (“PPP”), which prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion in forgivable loans – to be used toward job retention and certain other expenses – so that small businesses can continue to pay their employees during the COVID-19 crisis.
Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards. All loan terms will be the same for everyone.
According to the Treasury, the loan amounts will be forgiven as long as:
- The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8-week period after the loan is made; and
- Employee and compensation levels are maintained.
Additionally, payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. Loan payments will be deferred for 6 months.
Click here to view the full Information Sheet released by the Treasury.
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