The Coronavirus Aid, Relief, and Economic Security (CARES) Act has been approved allocating $349 billion to help small businesses keep workers employed during the Coronavirus (COVID-19) crisis. Known as the Paycheck Protection Program (PPP), this program provides businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.
Loan payments will be deferred for six months and the loan may be fully forgiven if borrowers maintain payrolls during the crisis and the funds are used as intended. At least 75% of the forgiven amount must be used for payroll and the forgiveness amount will be reduced if full-time headcount declines, or if salaries and wages decrease. This loan has a maturity of up to 2 years and an interest rate of 1.0%.
This program is for any small business with less than 500 employees and in operation as of Feb. 15, 2020 – including nonprofits, veteran organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors.