The Department of Treasury has released the Paycheck Protection Program application and supplemental information, all available on their website. We strongly recommend that our clients who are small business go to the SBA website and take the following steps:
- Review all four documents listed under the “Assistance for Small Businesses” section;
- Review the application and the Borrow Guide;
- Contact your banker to discuss the lender guide to ensure they are aware of program requirements and can assist.
The loans are available to businesses or 501(c)(3) nonprofits with less than 500 employees, including sole-proprietors, independent contractors, and other self-employed individuals. The loans under the Paycheck Protection Act can be for amounts of two and a half times monthly “payroll” costs, up to $10,000,000. Payroll costs include: Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee); Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit; State and local taxes assessed on compensation; and For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee. Funds from the program are 100% forgivable if used for employee salaries under $100,000, paid sick or medical leave, insurance premiums, and mortgage, rent and utility payments.
The attorneys at Allison & Mosby-Scott can help answer questions about the Paycheck Protection Act.