What Small Businesses Need To Know About the Paycheck Protection Program
For listeners, it’s easy to see that — just like the rest of the world — we here at the law firm of Tragos, Sartes & Tragos are consumed with all things COVID-19 related. In this recent episode, Peter and his father, George Tragos, interviewed professional accountant Paul Bedinghaus to answer common questions submitted by followers regarding the Paycheck Protection Program (PPP) for small businesses.
In this episode listeners, we answer the following questions:
- Who can apply for the PPP?
- Where can you apply for this loan?
- What amounts are employers and owners allowed to take out?
- What limitations does this loan have?
- What benefits are offered by PPP?
- Whom can you discuss your options with?
Paul Bedinghaus is a local CPA who has been practicing for over 25 years in Clearwater, Florida. In 1992, Paul opened up his own accounting firm specializing in advising small businesses.
What is PPP?
In the interview, Paul shares how the PPP is a small business loan opportunity that has been put into place because of the coronavirus pandemic and the effects it has had on the U.S. economy.
The PPP is designed to help small businesses keep people employed for up to 8 weeks. The loan’s primary purpose is for payroll, which includes gross pay for anybody up to $100,000 for annual compensation, healthcare benefits, state and local payroll taxes, and retirement plan contributions for each employee. It can also be used for rent, utilities, to pay interest on business loans that were in existence before the virus, and to pay interest on any mortgages the business has.
Who qualifies for PPP?
Any US-based small business (under 500 employees per location) can apply and qualify for this loan. However, the loan only applies to U.S. citizens. Independent contractors, sole proprietors, and other smaller businesses are also included in the loan program. This includes anyone who drives for a ridesharing service (like Uber or Lyft), who is self-employed and even those who receive a 10-99. But PPP does not include household employees and anyone in an illicit business.
How can you apply for PPP assistance?
Companies can apply for this loan through their bank. However, it’s recommended to call your bank ahead of time to make sure that they are accepting PPP applications. Many banks are still working to be able to help their customers. The application is thorough, but can easily be filled out. Paul advises seeking guidance from your company’s financial advisor or a CPA to protect your company.
Why is PPP valuable?
Here is the best piece of information we received from Paul:
This PPP loan doesn’t need to be paid back. In that way, it’s less of a loan and more of a grant.
This financial assistance might be huge for small businesses who are worried about how long the economy could be hurting and how they will “bounce back” after the shutdowns are lifted. The PPP is a game-changer, and small businesses should prioritize submitting their application before allocated funds run out.
A big shout out to Paul Bedinghaus for taking the time out of his busy schedule to help our listeners understand more about the PPP. We highly recommend reaching out to him if you or your company need help applying for this loan.
To learn more about the Paycheck Protection Program, listen to the full episode of Peter’s Proffer on Itunes, SoundCloud, Spotify and now YouTube!