Business Solutions

The Paycheck Protection Program

On Friday, May 22, 2020, the Treasury Department released two Interim Rules that detail the Forgiveness Criteria for recipients of a Paycheck Protection Program (“PPP”) loan: the Interim Final Rule on Loan Forgiveness, and the Interim Final Rule on SBA Loan Review Procedures and Related Borrower and Lender Responsibilities.

The Interim Forgiveness & Audit Rules inform the instructions contained in the Forgiveness Application. As such, it is critical that PPP loan recipients that intend to request forgiveness fully understand the standards set forth in the Interim Forgiveness & Audit Rules:

Click here to read Associated HCM’s breakdown of the Treasury Department’s Interim Rules. Please note that on May 28th, 2020 the U.S. House of Representatives passed legislation that proposes significant modifications to the PPP that are designed, in part, to relax and simplify PPP forgiveness.  We will continue to keep you update as legislation moves to the U.S. Senate.

The Paycheck Protection Program

The CARES Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. * As of April 27th, new legislation was passed by both houses of Congress and increased funding for the PPP by $310 Billion. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses.  Please read below for details about the Payroll Protection Program.

For information on how to apply for a Payroll Protection loan, visit the SBA website:

The US Department of the Treasury has released a fact sheet regarding PPP loans, what the loans can be used for, how much of the loan can be forgiven, how to request loan forgiveness and more. Click here to view the fact sheet.

On May 3rd, the SBA released a FAQ Page. Click here to view the FAQ’s!

Program Overview

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

The Paycheck Protection Program will be available through June 30, 2020.

Who Can Apply

This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19.  Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.

Small businesses in the hospitality and food industry with more than one location could also be eligible at the store and location level if the store employs less than 500 workers. This means each store location could be eligible.

How to Apply

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.

Lenders may begin processing loan applications as soon as April 3, 2020.

Loan Details and Forgiveness

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.  Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

This loan has a maturity of 2 years and an interest rate of .5%.

If you wish to begin preparing your application, click here to download the application to see the information that will be requested from you.

For more information:

Click here to read the guide created by the US Chamber of Commerce

Paycheck Protection Program FAQs for Small Businesses created by the US Senate Committee on Small Business and Entrepreneurship.

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