Payroll Protection Plan simplified for small businesses and freelancers

On Thursday and Friday last week, I spoke with my banker 3 times, then listened to a podcast with a financial advisor, talked to a lawyer and a bookkeeper about the Payroll Protection Plan, so I am passing on what I learned to you! As you know, I am not a financial advisor (by any stretch of the imagination), so please do your own research.

Here is what I learned:

How can you apply?

1. Fill out this form. (It took me about 10 minutes)

2. Provide documentation of your payroll. This could be a simple Profit and Loss statement that shows how much you paid yourself and your employees.

3. Send the documents to a bank that is administering these loans. Small banks were first to start on this. I hear the big banks will start administering these loans next week.

Who can apply?

Anyone who has a registered business. If you pay yourself as a sole proprietor or independent contractor you are eligible. If you have employees, you are eligible.

What is so great about it?

1. It is fully forgivable if you spend the funds on qualified expenses over the 8 week period after the loan is made.

2. If you do end up taking some of it as loan to cover unqualified expenses, the interest rate is really good (1% for 2 years and 100% guaranteed by the SBA) and they are not asking for any type of collateral.

How much you can ask for?

Average what you paid yourself, your employees and contractors between April 2019 and March 2020. You can ask for 2.5 times that amount.

What expenses qualify?

1. payroll costs (employee and compensation levels must be maintained over the 8 week period)

2. most mortgage interest

3. rent

4. utility costs

When can you apply?

ASAP!

• The opening date for businesses with more than 1 employee was April 3

• The opening date for Independent Contractors and Sole Proprietors is April 10

Apply as soon as possible because the funds are limited.

Here is info straight from the SBA.