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Paycheck Protection Program (PPP)

Posted by: Zaher Fallahi
Posted On: May 01, 2020

Paycheck Protection Program (PPP)

Small businesses may also apply for a loan through the Payroll Protection Program, which is designed to help provide capital to cover the cost of retaining employees. If certain criteria are met, the loan can be forgiven.  Paycheck Protection Program (PPP).

 Comment: Presumably, all businesses including independent contractors, have been impacted by the disaster and are eligible for this loan. The amount of loan is 2.5 times your monthly average payroll for the prior year, adjusted for a few items. For example, the annual highest salary per person is limited to $100,000. Provided that the funds are spent on payroll (at least 75%), rents, utilities, etc., this loan will be forgiven. Otherwise, it accrues 1% interest per annum.

These applications are filed with clients’ banks, with which they have online banking. Businesses could file these applications starting on April 3, 2020, and independent contractors could start filing them on April 10, 2020. On April 3, 2020, there was a lot of confusion about the processing of these applications and many banks were unable to accept them.