Q5: $ PPP – What changed, and should I apply ?

Today leaders asked questions around the $ PPP fund changes and application process. In this 3 minute episode I mention the main points (including why “the early bird gets the loan”, and the difference between leaders who can apply today vs. April 10th). Following are more details (and the schedule of the next free zoom webinars that go over both the EIDL and PPP loans and application process in detail);

Here are the important changes:

  • The loan rate has changed from .5% to 1%
  • The loan repayment period is reduced to 2 years from the 10 years
  • Proceeds for any advance up to the $ 10K on the EIDL loan, will now be deducted from the loan forgiveness amount on the PPP loan
  • Small businesses and sole-proprietors can apply for a loan as of April 3.
  • Independent contractors and self-employed individuals can apply for PPP loans as of April 10.
  • The maximum loan amount is the lesser of $10 million or an amount calculated using a payroll-based formula specified in the CARES Act.
  • Independent contractors do NOT count as employees for PPP loan calculations or loan forgiveness
  • At least 75% PPP loans proceeds must be used on payroll costs (whether or not used in the 8 week period eligible for forgiveness and to be eligible forgiveness such payroll cost must be paid during such 8 week period). The regulations say this change is required because of the “finite appropriations” made to support the PPP.
  • “Payroll costs” definition change means businesses are eligible for loan forgiveness based on the after tax pay to employees (after FICA and income tax are withheld) not the gross pay made by the employer.

The best course of action is to contact your bank and get a copy of their loan application and apply as soon as possible. These loans are available until June 30 or until the money appropriated for these loans runs out.

EIDL & PPP Overview

Monday April 6, 2020 via SBA / ZOOM

8:30am Join URL: https://score.zoom.us/j/394322660 Or by Phone: +1 346 248 7799 US (Houston) Meeting ID: 394-322-660

10:30am Join URL: https://score.zoom.us/j/847743171 Or by Phone: +1 346 248 7799 US (Houston) Meeting ID: 847-743-171

3:00pm Join URL: https://score.zoom.us/j/109522548 Or by Phone: +1 346 248 7799 US (Houston) Meeting ID: 109-522-548

Your leadership partner,

Birgit Kamps


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