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How to Apply for the Paycheck Protection Program Loan
St. Tropez
Paycheck Protection Program (PPP) Loans help small businesses pay their employees during the Coronavirus crisis
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If you qualify you should apply for the Paycheck Protection loan as soon as possible. Let me explain to you why and how. This office will help you with the application details.

Call us at (954) 646-4292.

The President signed the CARES Act into law on March 27 allocating $349 billion in forgivable loans to small business to pay their employees during the COVID-19 crisis. This program is called the Paycheck Protection Program (PPP).

CARES mean “Coronavirus Aid, Relief, and Economic Security Act” and it is a collection of initiatives, in addition to the PPP program, directed to provide cash relief for individual citizens, lending for small business and financial relief for specific industries.

You can find the full text of the law here: CARES ACT. March 27th, 2020.

The main purpose of the Paycheck Protection Program Loans is to help small businesses pay their employees during the Coronavirus crisis. Business must retain workers and maintain the payroll.

The PPP provides loans 100% guaranteed by the Small Business Administration to eligible borrowers at .5% to 1% with no payments due for six months. Loan payments will be deferred for six months.

These loans may be partially forgiven if at least 75% of the proceeds are used to cover payroll costs. This is most important. The loan is intended as a transfer of money from the Government to the employees, using the existing network to facilitate the process.

Eligible borrowers are small business and non-profits with less than 500 employees, and some tribal, veterans and other organizations that comply with SBA size requirements. But also, independent contractors, sole proprietors and self-employed individuals. As you can see, the program applies to a wide array of potential borrowers. All these categories must have been in business before February 15.

The interest rate was supposed to be 0.5% annual. But some banks have been arguing against this low rate, and it could be higher, to 1% for instance. In any case not higher than 4%.

The proceeds of the loan can also be used by the business owner to pay mortgage interest, rent and utility costs.

The maximum amount that can be requested is 2.5 times the average monthly payroll costs in the last 8 weeks. This means that if there are 10 employees in a business and each makes $2,000, the loan amount would be $50,000. The law says that the maximum per employee that can be requested is $100,000. It also says that the small business must have less than 500 employees and that the maximum loan amount per business cannot exceed $10 million.

What counts as a payroll expense is also a factor determining the amount to be applied for. Salaries, wages, commissions and tips are included. Also, employee benefits including costs for vacation, parental, family, medical or sick leave. Allowances for separation of dismissal, payments required for the provisions of group health care benefits, including insurance premiums, and payments of retirements benefits. Also, State and local taxes assessed on compensation.

For the sole proprietor or independent contractor, wages, commissions, income or net earnings from self-employment, capped at $100,000 annualized.

Remember that if payroll costs are paid with the proceeds of the loan, it will be forgiven.

The term is 2 years. And there will not be pre-payment penalties or fees. This means that the banks will not charge any fees to process these loans. Or the SBA. You will only have to pay fees to consulting services helping you with the application process or other private third parties.

The loans will not require collateral, either, or personal guarantee. You will only have to provide the lender documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks before getting this loan.

Document requirements are not clearly established yet. For self-employed and independent contractors banks might require payroll tax filings, forms 1099-MISC, or any others.

All documentation will be provided with your application, and you will state that it is accurate and true.

The loan application is here: Payroll Protection Program Loan Aplication.

There are some opinions regarding the fact that perhaps the $349 billion are not going to last. In any case, according to the text of the law the PPP loans can be requested from April 3rd to June 30th, 2020. But the start date will be pushed forward due to missing regulations that the banks are expecting to have.

Apply as soon as you can.

You can find more information at the SBA website: Small Business Administration Website

You can apply through any bank that is an SBA lender or through any federally insured depository institution, federally insured credit union and Farm Credit System institution participating in the program.

If you need our help, call to (954) 646-4292.

We will help you apply for the Paycheck Protection Program loan.