Almost every business has been negatively affected by the coronavirus pandemic, and many are in dire need of assistance because of it. One way that the government has tried to help struggling businesses is through an assistance program called the Paycheck Protection Program.
The Paycheck Protection Program (PPP) is part of the coronavirus relief funding that can be received by eligible small businesses. In response to the many businesses that have faced financial difficulties due to the pandemic, this funding is meant to help businesses to stay open and keep their employees on the payroll. While many businesses may have already benefited from the first round of PPP funding, there is another round of loans being distributed up until May 31.
The money for second draw PPP loans is specifically designed to help businesses that may have been previously underserved. Small businesses with fewer than 20 employees, specific business types such as independent contractors, and businesses in low-income areas will be shown special consideration during this round of loans. However, any business that can show a 25% reduction in quarterly earnings during 2020 compared to 2019 is eligible to receive a second loan of up to 3 ½ times the amount of payroll (up from 2 ½ times in the first round).
Although PPP is designed as a loan program, these loans can also be forgivable, provided employees and their compensation levels are maintained and PPP funding is spent on eligible expenses, at least 60% of which must be payroll expenses. These loans can be up to 100% forgivable when qualifications are met and forgiveness is applied for.
Federated Bank is participating in PPP, and we can help you apply for these funds for your business. But time is limited; applications must be made by May 31. Call your local Federated Bank office today for help in getting your paperwork together. We can help you to receive the funds you qualify for, working with you to keep your business up and running and ready to grow in 2021.
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