Facts & Loan Application Information: Payroll Protection Program (PPP)
Fully Forgiven
Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
Small businesses with 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors— are eligible. Businesses with more than 500 employees are eligible in certain industries.
Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply. We encourage you to apply as quickly as you can because there is a funding cap.
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. All loans will have the same terms regardless of lender or borrower. A list of participating lenders as well as additional information and full terms can be found at www.sba.gov.
The Paycheck Protection Program is implemented by the Small Business Administration with support from the Department of the Treasury. Lenders should also visit www.sba.gov or www.coronavirus.gov for more information.
The above overview of the Payroll Protection Program can also be found here.
LOAN APPLICATION SUPPORT
- Your banker needs to appreciate that you are a client of a PEO; therefore the traditional docs a lender requests (940, 941, W3, etc.) are not available as they are filed by Outstaffing as composite fillings under our EIN, etc. The Paylocity payroll reports should show all that is needed as to your prior 12-months payroll.
- Paylocity has committed to produce a detailed report providing all payroll information you should need to complete the application. Please call Outstaffing if you need a report.
More Information
The following are links to other information you may find helpful in navigating these difficult times.
BORROWER FACT SHEET FOR PPP LOANS