FAQs for Paycheck Protection Programme
Businesses have been adversely affected by the Covid-19 pandemic and the restrictions laid down by government authorities. The CARES Act provides relief to businesses in a number of ways. The Paycheck Protection Program (PPP) is one of the biggest programs under this act that provides support to businesses during these difficult times.
PPP provides businesses cash-flow assistance in the form of federal-guaranteed loans. It is meant for employers how have maintained their payroll during these harsh times. The following PPP FAQs should guide you on the key aspects of this program.
What is the deadline to apply?
According to the Small Business Administration (SBA), June 30, 2020 is the deadline for the agency to approve a PPP loan application. However, SBA also mentions that it will process application only until the funding lasts.
How much maximum loan is available under PPP?
The maximum loan amount offered under PPP is 2.5 times the average monthly payroll cost of a business. This amount is capped at $10 million. Only a single PPP loan application can be made, so it is recommended to apply for the maximum amount. We at QX can help assess you’re the amount of loan you may be eligible for.
What can the loan amount be used for?
The proceeds of the PPP loan can be used only for the following purposes:
The amount cannot be used for unauthorized purposes, else the amounts will have to be repaid. QX can guide you on all the eligible expenses to further help you with a potential loan forgiveness application.
How long does the application process take?
Your bank will submit your PPP loan application to the SBA after completing a review. Once a decision from SBA is received, the bank will send you an email about the status.
Where will the loan amount get deposited?
The funds granted by the SBA from the PPP will get deposited to your checking account with the bank you designed when filing your application.
Can I apply for PPP loan forgiveness?
Yes, PPP loans can be foreign if the funds have been used towards eligible expenses. The SBA has laid down the rules for borrowers to prepare and submit their loan forgiveness applications. The agency has also laid down the rules for the PPP lenders to make decisions on loan forgiveness.
How to apply for loan forgiveness?
You must file the Loan Forgiveness Application SBA form with the 3508 with the bank or lender where you applied for the loan. The SBA has announced that it will be releasing a new Loan Forgiveness Application with new guidelines.
How to gather all the documentation for filing PPP and forgiveness application?
Filing for PPP and forgiveness application will require preparation of a wide range of documentation. We at QX can make the process simple and quick for you with our expertise. We can help you with your business tax returns, financial statement for all the eligible expenses, and define current assets and liabilities. We also provide you guidance with filing your online loan application.
Is there a due date for PPP forgiveness application?
There is no mention of due date for submitting the forgiveness application from the SBA. However, the SBA does mention that borrowers not submitting a loan forgiveness application within 10 months after the loan forgiveness covered period ends will have to pay principle and interest after the period.
How to know if you were approved for forgiveness?
If a loan has not been reviewed by the SBA, a forgiveness application can take up to 5 months. The duration is even longer for PPP loans that have been reviewed by the SBA. After you submit your application for forgiveness to the lender, the lender can take up to 60 days to review it and submit their decision to the SBA.