COVID-19: Paycheck Protection Program (PPP)
The Paycheck Protection Program, part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, is a federal loan program aimed at helping small businesses who've been impacted by COVID-19.
The main objective of this loan is to help these businesses retain their workforce and assist with other operational expenses.
While the requirements and documentation will vary upon lenders, the following checklist will provide a idea of necessities:
Prior to applying, be sure to prepare the following:
Documentation to Calculate Loan Amount Eligibility
To calculate your eligible loan amount, you'll need:
- Payroll reports for both 2019 and 2020, including:
- Paid vacation
- Paid Family Medical Leave (FMLA)
- State and local tax documents (Form 940, 941, 944)
- 1099s for independent contractors
- Terminated employees
- Completed 2019 tax return (OR 2019 Profit and Loss Report & Balance Sheet)
- Filed 2018 Business Tax Return
- Documentation showing:
- Funds Received in the Form of an Economic Injury Disaster Loan Since January 31, 2020 (if any)
- Payments for group healthcare, including benefits paid in 2019-2020
- Payment of retirement/401(k) benefits paid in 2019-2020
Additionally, it may be beneficial to get in contact with your benefits broker to discuss the amount paid for group healthcare and retirement.
Verification of Forgiveness Amount
To verify the amount of the loan for which you may be forgiven, please provide:
- Quarterly IRS Form 940, 941 or 944 for
- March 31, 2019 - June 30, 2019
- March 31, 2020 - June 30, 2020
- Documentation in the form of canceled pay checks, payment receipts and bank statements showing payment in the following items from February 15, 2020 - June 30, 2020:
- Mortgage interest
- Rent payments
Complete the Paycheck Protection Application
The application is meant to be completed and submitted to your SBA participating lender. You can download your application here.
While the $350 billion allocated to the Paycheck Protection Program is likely to run out of funds quickly, it's necessary to prepare as best as possible before applying for your organizations loan. To learn more about eligibility, click here.
For more guidance and resources, visit https://www.sbc.senate.gov/public/index.cfm/guide-to-the-cares-act
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