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What is the Paycheck Protection Program?

The following is a high-level overview of the PPP loan program.

  • All businesses operating on Feb 2020 with less than 500 employees are eligible
  • The loan has a maturity rate of two years and an interest rate of 1%.
  • The loan covers expenses for 24 weeks starting from the loan disbursement date
  • No need to make loan payments until either your forgiveness application is processed, or 10 months after your 24-week covered period ends
  • No collateral or personal guarantees required
  • No fees

At AccuComp Enterprises, we’re helping businesses navigate stimulus funding by connecting them to lenders.

Paycheck Protection Consulting Services

Am I Eligible for a PPP Loan?

Small businesses, sole proprietorships, nonprofits, churches, independent contractors, and self-employed individuals are all eligible.

What Documents Are Required?

  • Sole proprietorships will need to submit a Schedule C from their tax return filed (or to be filed) showing the net profit from the sole proprietorship.
  • Independent contractors will need to submit Form 1099-MISC (now 1099-NEC in 2020) in addition to their Schedule C.
  • Self-employed individuals will need to submit payroll tax filings reported to the Internal Revenue Service.

Looking for Your Second Draw?

Businesses looking to apply for their second PPP loan will need to show a 25% or greater reduction in revenue. This will be shown by comparing revenue between any quarter in 2020 with the same quarter in 2019.

How Can Your PPP Monies Be Used?

At least 60 percent of the PPP loan must be used to fund payroll and employee benefits costs.

The remaining 40 percent can be spent on:

  • Mortgage interest payments
  • Rent and lease payments
  • Utilities
  • Operations expenditures such as software and accounting needs
  • Property damage costs due to public disturbances not covered by insurance
  • Supplier costs such as cost of goods sold
  • Worker protection expenditures to be COVID compliant

If you stick to these guidelines, you’ll be able to have 100% of the loan forgiven (effectively turning it into a tax-free grant).

How Much PPP Funding Can I Receive?

The maximum amount you can receive from your SBA-approved lender is your monthly average payroll cost in 2019, 2020, or the one year period before the application. Multiply it by 2.5, up to a maximum of $2 million.

For businesses in the food and accommodation industries, you are eligible for 3.5 times your average payroll costs, also with a maximum of $2 million.

What is PPP Loan Forgiveness?

In general, the loan amounts will be forgiven so long as:

  • PPP borrowers are eligible for full loan forgiveness so long as they use at least 60% of loan proceeds for payroll expenses, with no more than 40% of loan proceeds going to eligible non-payroll expenses.
  • the loan is used to cover payroll costs and other eligible expenses over the 8- to 24-week period after the loan is made; and
  • for loans greater than $50,000, employee and compensation levels are maintained.

How Much of My Loan Will Be Forgiven?

You will owe money when your loan is due if you use the loan for anything other than payroll costs, interest on a mortgage, rent payments, utility payments, operating expenses, costs to repair property damage, costs of supplies necessary to entity operations, and expenses for protecting workers during the covered loan period.

For loans greater than $50,000, you will also owe money if you do not maintain your staff and payroll.

  • Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount.
  • Level of Payroll: If your total eligible payroll expenses (excluding compensation in excess of $100,000 per employee per year) decreases by more than 25%, loan forgiveness will be reduced by the same amount.
  • Limited Exception for Workforce Restoration: You will not be penalized for lay-offs and wage reductions that occurred between February 15, 2020 and April 26, 2020, provided that you restore employment and wages to February 15, 2020 levels by December 31, 2020 (for loans made before the enactment of the Economic Aid Act on December 27, 2020) or by the last day of your covered loan period (for loans made on or after December 27, 2020).

Contact us about working together to secure your PPP funding.?

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