In efforts to slow the spread of the coronavirus pandemic, closures of small businesses have swept across the country.
As a result, thousands upon thousands of small business owners have been placed under immense pressure – and many have even failed as a direct result of new government restrictions and regulations.
Thankfully, there are solutions in place to help you through this tough time, including the new Paycheck Protection Program. Get a quick look at what it is and if you can qualify, right below!
The Paycheck Protection Program (PPP)
The Coronavirus Aid, Relief, and Economic Security (CARES) Act – signed into law on March 27, 2020 – introduced a new federal relief initiative known as the Paycheck Protection Program (PPP). This program was launched with $349 billion of funds meant to assist small businesses to overcome the economic pressures brought on by the COVID-19 crisis.
As the name suggests, the PPP is primarily designed to help small businesses cover their payroll expenses, though businesses are permitted to use funds to cover some other expenses including mortgage interest, rent, and utilities. Overall, the main focus of the PPP is to help reduce the number of employees that are being laid off from their jobs at small businesses.
If you are approved for a PPP loan, and you use the funds for the intended purposes as outlined by Paycheck Protection Program guidelines, then you can apply for loan forgiveness and potentially be forgiven for the entire loan amount.
Curious if your business qualifies for the Paycheck Protection Program? Scroll down to see what the requirements are.
Who is eligible for the Paycheck Protection Program?
There are several eligibility criteria for the Paycheck Protection Program which are meant to assure that only those businesses which truly need the help will be approved.
You can qualify for a PPP loan if:
- Your organization meets the SBA definition of a ‘small business’, is a nonprofit, veterans organization, Tribal business concern, sole proprietorship, or if you’re a self-employed individual or independent contractor
- You can prove that your business has been affected by the coronavirus pandemic
- Your business has fewer than 500 employees
- Your business was active prior to February 15, 2020
Of course, meeting eligibility requirements is just the first step. You’ll need to submit a PPP loan application and provide any/all required documentation as outlined by the lender you apply with. The deadline for PPP loan applications is June 30, 2020. If you make the deadline, good on you! But there still reasons that your application may be denied.
5 reasons you will be disqualified from getting a PPP loan
The final section of the Paycheck Protection Program application form includes several questions that explain five ways that you may be disqualified from getting a PPP loan.
Below, we list the reasons for which your business may be denied a PPP loan, along with the associated quote taken directly from the PPP application.
Note: If you answer “yes” to any of the questions listed below, you may be disqualified from getting a PPP loan.
- You’re delinquent or have defaulted on any federally-guaranteed loans in the past 7 years
“Has the Applicant, any owner of the Applicant, or any business owned or controlled by any of them, ever obtained a direct or guaranteed loan from SBA or any other Federal agency that is currently delinquent or has defaulted in the last 7 years and caused a loss to the government?”
- You or any other owner of your business is suspended from Federal financial aid
“Is the Applicant or any owner of the Applicant presently suspended, debarred, proposed for debarment, declared ineligible, voluntarily excluded from participation in this transaction by any Federal department or agency?”
- You or any other owner of your business is presently involved in any bankruptcy
“Is the Applicant or any owner of the Applicant presently…involved in any bankruptcy?”
- You or any other owner of your business is presently facing criminal charges or is on probation/parole
“Is the Applicant (if an individual) or any individual owning 20% or more of the equity of the Applicant subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction, or presently incarcerated, or on probation or parole?”
- You or any other owner of your business has been convicted of a felony in the past 5 years
“Within the last 5 years, for any felony, has the Applicant (if an individual) or any owner of the Applicant 1) been convicted; 2) pleaded guilty; 3) pleaded nolo contendere; 4) been placed on pretrial diversion; or 5) been placed on any form of parole or probation (including probation before judgment)?”
Ready to apply?
The Paycheck Protection Program has become a point of interest for virtually every business owner in the United States by now. While the deadline for submitting applications is June 30, 2020, there are many reports suggesting that the funds may run out much sooner.
Don’t wait – apply for a PPP loan today while the aid is still available!