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Paycheck Protection Program Details

Updated: Apr 2, 2020

While the SBA has yet to publish its written interpretation of the bill and guidance, here is what we currently know about the PPP

To be eligible, the business must have been operational on February 15, 2020, and had employees for whom it paid salaries and payroll taxes, or a paid independent contractor

Must have 500 employees or less, or the applicable size standard for the industry as provided by SBA if higher. Check HERE for size standards per NAICS code

Under current guidelines, affiliation is taken into consideration, and must aggregate all affiliate companies to fall under size standard to be eligible

Affiliation rules for businesses in the hospitality and restaurant industries are waived

Loan size is calculated at 2.5x last year’s average monthly payroll expenses, with maximum lending amount at $10 million. Below are examples of what counts as a payroll expense:

  • salary, wage, commission, or similar compensation

  • payment of cash tip or equivalent

  • payment for vacation, parental, family, medical, or sick leave

  • allowance for dismissal or separation

  • payment required for the provisions of group health care benefits, including insurance premiums

  • payment of any retirement benefit

  • payment of State or local tax assessed on the compensation of employees

  • the sum of payment of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self- employment, or similar compensation and that is in an amount that is not more than 100,000 in 1 year, as prorated for the covered period

Both borrower and lender fees are waived

The credit elsewhere test is waived

No personal guarantee is required

No collateral is required

Maximum interest rate is 4%

Gov’t guarantee will be 100% through end of 2020

Loan proceeds can be used for other business-related expenses, but stipulations apply to loan forgiveness. To be eligible for loan forgiveness:

  • Borrower shall be eligible for loan forgiveness equal to the amount spent by the borrower during an 8-week period after loan closing. (sum of expenses for payroll, and existing interest payments on mortgages, rent payments, leases, and utility service agreements)

  • 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

  • Any loan amounts not forgiven at the end of one year is carried forward as an ongoing loan with terms up to 10 years, at max 4% interest. The 100% loan guarantee remains intact

  • Funds must be used to retain employees through June 2020. If employees are laid off, loan forgiveness may not occur for those specific employees

Subsidy on loan payments:

  • No borrower payments for 6 months

  • Potential for 12 month deferral on payments

Click HERE to download a copy of the PPP loan application.

Need more help? Contact us to day at 816.969.9234 or

Disclaimer and Liability Limitations: Every effort has been made to provide you with the most accurate and current information on this subject matter as possible. Because Human Resources is a field of frequent change, the information contained herein should not be relied upon as the final source, since the information may have changed prior to time of use. The contents of this document are not intended to provide legal advice, nor is RISE Consulting, LLC engaged in rendering legal advice. If legal advice is required, the services of a legal professional should be sought. RISE Consulting, LLC, has endeavored to ensure accurate information has been conveyed in this employment tool and is not liable for any error or omission, or for any legal claims or damages that are beyond its control or are the result of actions for which it is not directly involved. Advisory services are offered by RISE Consulting, LLC, a Registered Investment Advisor in the States of Kansas and Missouri. Insurance services are offered by RISE Agency, LLC. RISE Consulting, LLC and RISE Agency, LLC are not affiliated with or endorsed by the Social Security Administration or any government agency.

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