Business Lawyers Blog
The U.S. Business Administration (“SBA”) has implemented the Paycheck Protection Program, which provides $349 billion in administered loan and loan forgiveness relief to small businesses in financial need. Small businesses with less than 500 employees are eligible to participate in the program, in addition to sole proprietors, independent contractors and self-employed individuals. The Paycheck Protection Program offers loans up to $10 million for business expenses including payroll, rent, mortgage interest, utilities, and certain group health plan fees. Business that elect to participate in the program are not required to provide collateral or show that their financial hardship is related to the COVID-19 crisis. The Paycheck Protection Program offers a 6-month grace period in which lenders are obligated to defer loan payments. Further, business that use their loan on payroll, rent, mortgage interest, or utilities in the 8-week span after the loan is funded can be forgiven up to the full amount of the loan. This forgiven amount is considered taxable income. The Paycheck Protection Program will expire on June 30, 2020.
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