The United States Congress and the Small Business Administration (“SBA”) created the Payroll Protection Program (“PPP”) in response to the COVID-19 pandemic as an incentive for small businesses to retain workers on their payroll. The PPP is an SBA loan that can be fully forgive if borrowers use their funds on eligible expenses, the employee retention criteria is met, and the borrower properly applies for forgiveness (see our article “Coronavirus Aid, Relief, and Economic Security Act (CARES Act)” for more information). The PPP was set to expire and stop accepting applications on June 30, 2020. However, Congress and the President enacted legislation on July 4, 2020 to continue the PPP. PPP applications will now be accepted through August 8, 2020.
The loans—if unforgiven—carry a 5-year maturity term with an interest rate of 1%. Loan payments will be deferred for six months. The SBA does not require collateral or a personal guarantee for borrowers to get a PPP loan.
If you think your small business could benefit from a PPP loan, our office can help you apply and navigate the forgiveness process. If you have any questions regarding the PPP application or forgiveness process or want to hire our office to help your small business apply for the PPP, please reach out to Attorney Sam Chapin at 651-262-2083.