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The Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, and the subsequent Emergency Coronavirus Relief Act (ECRA) within the Consolidated Appropriations Act (CCA) in December of 2020 allocated hundreds of billions to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program 1 (PPP1) and Paycheck Protection Program 2 (PPP2), these relief initiatives provide 100% federally guaranteed loans at 1% interest to small businesses where all loan terms will be the same for everyone.
Importantly, qualified portions of these loans may be forgiven if borrowers use the loans for the following purposes over the 8 or 24 week period after the loan is made, and employee and compensation levels are maintained as they were prior to the coronavirus:â— Payroll costs for those whose primary residence is the United Statesâ— Most mortgage interest and rentâ— Utility costsâ— Operating costs related business softwareâ— Supplier costs for physical goods needed to run the businessâ— Damage costs related to social disturbances during 2020â— Safety costs to protect employees and customers
Payroll costs are capped at $100,000 of gross salary on an annualized basis for each employee. At least 60% of the forgiven amount must be spent on payroll costs to receive full forgiveness. Loan payments are automatically deferred until the SBA forgives the loan or 10 months after the end of the loan period if borrow doesn't apply for forgiveness.
What You Need To Know
Emergency Relief °®ÁÄÊÓƵ
â— Cash Flow Analysisâ— Tax Planningâ— Tax Extension Preparationâ— Tax Appeals and Tax Resolutionâ— State and Local Tax Reliefâ— Special Deductions and Creditsâ— S Corps and Partnership Budgetingâ— C Corp Budgetingâ— Sales and Use Tax Reliefâ— SBA Loan Consulting
We are guided by efficient work with clients. Here’s what you will need to apply for an SBA 7(a) Paycheck Protection Program loan unless the SBA or your lender decides to accept an expedited application:
Please visit our page on PPP forgiveness considerations
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