Banks will soon begin processing loans under the Paycheck Protection Program.
The new program:
- Includes money for employee salaries under $100,000; paid sick or medical leave; insurance premiums; and mortgage, rent and utility payments.
- Sets the funds up as a loan that is eligible for 100% forgiveness if used for the above purposes and in conjunction with guidelines related to staff retention.
- Provides funding for businesses or 501(c)(3) nonprofits with less than 500 employees, including sole-proprietors, independent contractors, and other self-employed individuals.
- Waves affiliation rules for businesses in the hospitality and restaurant industries, and specifies that businesses with more than one physical location can be eligible so long as no one location employs more than 500 individuals.
Congress is promising quick and efficient fund access for small businesses. Banks may be accepting loan applications as early as the week of April 6th. CPA firms will have a critical role to play in making sure small businesses get these funds quickly. The bill requires eligible borrowers to make a good faith certification that the loan is necessary due to the uncertainty of current economic conditions caused by COVID-19. As trusted advisors, CPAs will have a key role in assisting in the verification of loan eligibility, assembling necessary documentation, preparing loan applications, documenting eligibility for loan forgiveness.
Over the next few days, we will provide more information on the role we can play, as well as details on how you as a small business can take advantage of all the benefits this legislation offers. Stay tuned.
Throughout this process, our overarching aim will be to keep small businesses running and employees paid. We are happy to report that this bill does that, and we at Fricke &Associates, PC look forward to assisting you.