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The government has had to take drastic action to stop the spread of COVID-19. This has taken a major toll on the business community. In response to these regulations, some organizations have had to close their doors. Others have seen a drastic reduction in customer numbers, as people are told to stay at home. To offer financial support, the government has introduced the paycheck protection program (PPP). But what is this program and how can your business take advantage of it? Let’s look at everything you need to know about the PPP program.

What Is A PPP Loan?

Let’s start by looking at what this program is and how it works. During the COVID-19 crisis, it’s become more challenging for employers to justify keeping workers on the payroll, especially if they are not making any money. To help them, the federal government announced the CARE Act. This was part of a huge economic stimulus package, with the PPP loan program funded for $390 billion. This provided a range of benefits to business owners. Now, they will be able to apply for a loan through the Small Business Administration (SBA). As we’ll see later, you can have this loan forgiven later, as long as you follow certain conditions.

How Does A PPP Loan Work?

If you need money to pay for payroll expenses, you will be able to use a PPP loan. The exact length of the loan will depend on the amount you are applying for. However, they have a maximum term of two years. Also, you can defer payments for the first six months. However, during this period, the interest will still be growing. Thankfully, the lender is only able to charge a maximum one percent interest rate under this loan.

Who Is Eligible For A PPP Loan?

Now that we understand what this program is, you need to determine if you will be eligible. There are a few requirements that you will need to meet. First, you will need to have been in business since the 15th of February 2020. You will also need to show that you were negatively impacted by the COVID-19 crisis. You will also need to show that you were paid payroll taxes, or you paid independent contractors. Lastly, you will need to show that you are a small business, employing less than 500 people.

There are several types of businesses that will be able to apply for a loan under these guidelines. For example, small business owners will be able to access financial relief. These loans can also extend to sole traders or self-employed individuals. Tribal businesses and veterans’ businesses will also be able to apply. Not-for-profit organizations might also be eligible to take out a loan under the CARE Act.

Another area that is causing a lot of confusion is whether you can apply if you have already received an EIDL loan. This Economic Injury Disaster Loan (EIDL) is designed to help businesses make it through a disaster that has caused widespread economic damage. In most cases, this applies to events like hurricanes or floods. However, due to the unprecedented nature of the COVID-19 crisis, the EIDL loan was made available to business owners. Thankfully, you will be able to apply for a PPP loan even if you’ve already received an EIDL loan. However, you need to make sure that you don’t use the money from the loans to pay for the same things. In this case, you won’t be able to use the EIDL loan for the payroll costs which are covered by a PPP loan.

Hopefully, you now have a good idea about whether you are eligible for a PPP loan. However, if you are still unsure, or want more information, you can talk to the team at South Florida Funding Group: 786-544-2700.

How Does Loan Forgiveness Work?

One of the benefits of taking out a PPP loan is the ability to get it forgiven later. This means that you might not have to pay the loan back. However, for this to happen, you will need to follow a few guidelines, and only the spend the money on certain things.

To be eligible for the loan to be forgiven, you will need to make sure that you spend at least 75 percent of the loan on payroll expenses. This can include things like giving your staff a wage, providing tips, and providing other benefits, like sick leave or holiday pay. You can also spend it on other things, like making mortgage payments, making rent payments, or paying your utility bills.

If you follow these guidelines, you will need to send a forgiveness request to your lender in writing. This request should provide details about how the money was spent. Once they receive the request, the lender will need to respond to it within 60 days.

How Much Can You Apply For?

The amount you can apply for often depends on the size of your business. You can be eligible for up to 10 million dollars, or 2.5 times your average monthly payroll, whichever is smaller. If you are unsure about the amount you need, you can talk to the South Florida Funding Group, who will be able to help you through the loan process. If you feel like you need to get access to more funds, you might want to consider taking out a loan through the EIDL program.

What Payroll Costs Aren’t Eligible

To work out how much you can apply for, and what expenses you can spend the money on, you will need to know your eligible payroll costs. When doing this, there are a few costs that you won’t be able to include.

First, you won’t be able to seek payroll for anyone who lives outside of the United States. Also, sick or family leave that could be covered under the Families First Coronavirus Response Act. You should also be aware that you will only be able to compensate each employee up to $100,000 per year, for the period between February and June 2020.

When Do You Need To Apply By?

This loan is only meant to be temporary, helping businesses survive the financial downturn caused by COVID-19. For this reason, the program will end on June 30th, 2020. If you haven’t made an application by then, you won’t be able to receive a PPP loan. So, it’s best to start preparing your paperwork and talking to lenders today.

What Lenders Are Available?

In some cases, you might have already taken out a loan through your lender. In this case, you can get in contact with them and ask whether they are participating in the PPP program. This can reduce the amount of paperwork that you need to fill out.

However, if you don’t have a loan provider, or want to explore what other options are on the market, there are multiple options for you to choose from. But this can make it harder to find the right one for you. To make this easier, the friendly team at South Florida Funding Group will be able to talk about your situation and help you find the right lender for your needs. By doing this, you will get the confidence that you are getting a reliable lender.

What Documents Will I Need To Show?

The good news is that you won’t need to provide any collateral or guarantees to be eligible for this loan. However, you will need still need to show several documents. First, you will need to fill out SBA form 2483, which is your application form. Then, you will need to provide some evidence to show that you paid employees and the associated payroll taxes around February 15th, 2020. You will also need to provide documents that show what your average monthly payroll figures are, so the lender can determine how much you are eligible to apply for.

Who Can Help Me Through The Process?

As you can imagine, filling out the required paperwork can be a complicated and exhausting process. Thankfully, the South Florida Funding Group can help you. When you get in touch with us, we will be able to talk about your situation. Then, we can help you fill out the required documents. Once done, we can help you find a lender that you can trust. By doing this, we make applying for a PPP loan easy.

The COVID-19 pandemic has hit the business community hard, with many companies struggling to make payroll payments. Thankfully, the PPP program is designed to make this easier, allowing you to retain staff during this difficult time. Hopefully, you now have a better understanding of what this program is and how it works. If you want more information, or want to start applying for a loan, make sure to get in contact with the friendly team at South Florida Funding Group. They’ll be able to guide you through the process, making it easier for you to get a PPP loan.  Call today: 786-544-2700.

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The business funding you need when others say No!.

2569 Bay Pointe Dr.
Weston FL 33327

Email:
drew@southfloridafundinggroup.com 

786-544-2700

DISCLAIMER

 The operator of this website is NOT a lender, does not make offers for loans, and does not broker online loans to lenders or lender partners. Customers who arrive at www.SouthFloridaFundingGroup.com are matched with a lender or a lender partner, who offer business loan products or credit repair services.