Frequently Asked Questions:
I am a small business owner, where can I apply for the Paycheck Protection Program?
- You can apply for the Paycheck Protection Program (PPP) at any lending institution that is approved to participate in the program through the existing U.S. Small Business Administration (SBA) 7(a) lending program and additional lenders approved by the Department of Treasury. This could be the bank you already use, or a nearby bank. There are thousands of banks that already participate in the SBA’s lending programs, including numerous community banks. You do not have to visit any government institution to apply for the program. You can call your bank or find SBA-approved lenders in your area through SBA’s online Lender Match tool. You can call your local Small Business Development Center(s) and they will provide free assistance and guide you to lenders.
Who is eligible for the PPP loan?
- You are eligible for a loan if you are a small business that employs 500 employees or fewer, or if your business is in an industry that has an employee-based size standard through SBA that is higher than 500 employees. In addition, if you are a restaurant, hotel, or a business that falls within the North American Industry Classification System (NAICS) code 72, “Accommodation and Food Services,” and each of your locations has 500 employees or fewer, you are eligible. Tribal businesses, 501(c)(19) veteran organizations, and 501(c)(3) nonprofits, including religious organizations, will be eligible for the program. Nonprofit organizations are subject to SBA’s affiliation standards. Independently owned franchises with under 500 employees, who are approved by SBA, are also eligible. Eligible franchises can be found through SBA’s Franchise Directory.
I am an independent contractor or gig economy worker, am I eligible for a PPP loan?
- Yes. Sole proprietors, independent contractors, gig economy workers, and self-employed individuals are all eligible for the Paycheck Protection Program.
What is the maximum amount I can borrow under the PPP?
- The amount any small business is eligible to borrow is 250 percent of their average monthly payroll expenses, up to a total of $10 million. This amount is intended to cover 8 weeks of payroll expenses and any additional amounts for making payments towards debt obligations. This 8 week period may be applied to any time frame between February 15, 2020, and June 30, 2020. Seasonal business expenses will be measured using a 12-week period beginning February 15, 2019, or March 1, 2019, whichever the seasonal employer chooses.
How can I use PPP money such that the loan will be forgiven?
- The amount of principal that may be forgiven is equal to the sum of expenses for payroll, and existing interest payments on mortgages, rent payments, leases, and utility service agreements. Payroll costs include employee salaries (up to an annual rate of pay of $100,000), hourly wages and cash tips, paid sick or medical leave, and group health insurance premiums. If you would like to use the Paycheck Protection Program for other business-related expenses, like inventory, you can, but that portion of the loan will not be forgiven.
What are the recovery assistance payments provided to families and individuals through the CARES Act?
- A one-time tax rebate check of $1,200 to every American whose 2018 tax return, or 2019 if filed, showed income at or below $75,000. That’s $2,400 per married couple, with an extra $500 per child OR $1,200 for single parent, with an extra $500 per child. There’s no minimum threshold, so all working people benefit.
Who is eligible for an economic impact payment?
- All U.S. residents with adjusted gross income under $75,000 ($112,500 for head of household and $150,000 married), who are not the dependent of another taxpayer and have a work-eligible Social Security Number, are eligible for the full $1,200 ($2,400 married) rebate. They are also eligible for an additional $500 per child.
Are seniors whose only income is from Social Security or a veteran whose only income is a veterans’ disability payment eligible?
- Yes, as long as they are not the dependent of another taxpayer. The bill also provides the IRS with additional tools to locate and provide rebates to low-income seniors who normally do not file a tax return by allowing them to base a rebate on Form SSA-1099, Social Security Benefit Statement or Form RRB-1099, which is the equivalent of the Social Security statement for Railroad Employees. However, seniors are still encouraged to file their 2019 tax return to ensure they receive their recovery rebate as quickly as possible.
How will I get my aid payment
Direct deposits began the weekend of April 11th - and more deposits will come in the following weeks. Everyone who gets a payment will receive a written notice within 15 days after the payment that specifies how much you received and how it was delivered. The IRS will also launch the “Get My Payment” app, which will allow taxpayers to track the status of their payment. It is anticipated that those that currently have direct deposit setup with the IRS will receive their rebate checks faster than those who only have a physical address on file.
Is the rebate taxable or will I have to pay it back?
- No. The check is a rebate, not a loan. These rebates do not need to be paid back in next year’s filings. The rebate is treated like other refundable tax credits and not considered income. Additionally, if the rebate amount you qualify for based on your 2020 income is less than what you qualify for based on your 2019 tax return, it does not have to be paid back.
Is there any relief for renters in the bill?
- Yes. The bill puts a temporary, nationwide eviction moratorium in place for any renters whose landlords have mortgages backed or owned by Fannie Mae, Freddie Mac and other federal entities. This will last for 120 days after the bill passes, and landlords also cannot charge any fees or penalties for nonpayment of rent.
Setting the Record Straight:
I heard the CARES Act includes a bailout for corporate companies and is basically a slush fund - is that true?
- There is money to support national industry like airlines, cargo airlines, and businesses important to maintaining national security. These funds are required to be paid back - and funds dispensed to these industries in the form of direct grants will allow investment options for the Treasury Department. These loans are not bailouts or no-strings-attached funding. To qualify for loans, these companies will be barred from stock buybacks until 12 months after the loan is no longer outstanding, have limits placed on officer and employee compensation, and/or are required to maintain certain employment levels.
- Additionally, any company that the President, Vice President, Members of Congress, and their families own or have a controlling stake in, cannot receive the loans.
I heard Congress gave itself a pay raise under the bill – is that true?
- No, Congress did not vote to give itself a pay raise in this bill. There were additional funds appropriated under the Legislative Branch, but those funds were specific to expanding access to telework capabilities and reimbursing childcare workers and food-service contracts.
How does the latest version of CARES package protect workers, not boost executive compensation?
- Employee and executive total compensation may not exceed $425,000, stock buybacks are prohibited during the duration of the loan, and borrowers must maintain existing payroll as of March 13.
I heard Nancy Pelosi tried to include many unrelated provisions – were these included in the final package?
- House Democrats proposed including provisions from “Green New Deal” and other far-left agenda items in this package, including a bailout for the U.S. Postal Service, increased support for unions, and requiring airlines to go carbon-neutral by 2025. These were NOT included in the final version of the CARES Act.