As the country experiences a multitude of changes socially and in the business world, how can PPP help you?
First and foremost, it's important to understand exactly what the Paycheck Protection Program is and how it can apply to you. According to the U.S. Small Business Association website, PPP is "a loan that helps businesses keep their workforce employed during the COVID-19 crisis."
Businesses who qualify for PPP loans need to know that forgiveness will cover only eight weeks of payroll beginning on the initial day of funding. In addition, there are two choices that follow:
Start paying bi-weekly and continue to do so for the entire eight weeks
Calculate what would have been eight weeks pay if you pay either once or twice a month
With that being said, choosing option one may be preferred due to the fact that it will make forgiveness documentation easier and more transparent for both parties. It is also worth noting that if you have fewer employees during that eight week time period than throughout the qualifying year, your eligible reimbursement will be reduced accordingly. If you have half of your normal staff working, your reimbursement will be reduced by half as well.
Forgivable costs, including rent and similar utilities, will have to be adjusted at the end of the loan period unless they are adjusted by your landlord. It is highly recommended to not spend the money for anything other than "permissible purposes" unless:
You want the government questioning your "needs" and spending
You are ready, willing and able to pay the money back
Money spent on anything else other than necessities for your business is not forgivable, and the final review will require much more detail than the application review. In the end, this program can be extremely beneficial to your business surviving this crisis and may save you headaches on the back end.