Paycheck Protection Program: Have you applied?

Over the weekend, I spoke with about a dozen 1099 or business-owner clients who (a) either still did not know about the Paycheck Protection Program or (b) did not intend to apply for various reasons.  Some discussion of that.

  1. If you don’t know about the program, educate yourself. It is broad and generous. It encompasses almost every sole proprietor, 1099 contractor and business owner in the nation.  Read about it generally here and watch this webinar for employers with W-2 employees and this webinar aimed primarily at sole proprietors and 1099 contractors.
  2. Do I have to suffer closure or severe economic damage under the COVID-19 crisis  to be eligible? No. This program makes virtually no distinction between those severely impacted and those still operating “normally.” You do need to certify some impact from the COVID-19 crisis.
  3. Isn’t this just another SBA loan program with lots of paperwork and loan fees? No, not at all.  (a) First, it is a “forgivable loan.” (b) The primary condition is that you must continue to employ your employees for 8 weeks (or call them back if you already laid them off) after the loan is made. (c) If you meet that and a few other simple conditions, the “loan” becomes a grant. (d) It is east to apply. (e) There are no fees. (f) There is no loan guarantee.  (g) Even creditworthiness is not considered. This program is designed quickly to get cash into the hands of businesspersons so they can maintain their payroll and avoid bankruptcy.
  4. How do I apply? Call your bank.  If you need more help, contact Rebecca L. Simpson of our office (513.797.2856).  Candidly, it is fairly easy and straightforward.
  5. But I read the program already is out of money? Yes, this is true, but it appears likely that Congress is poised to authorize another $300 billion this week.  Our view is the program will be fully funded until every eligible business which applies has been funded.
  6. Does the program apply to churches and other non-profits?  The program does have special rules for churches, but it generally applies to all 501-C3s and C-19s (veterans organizations).
  7. I don’t need the money; let someone else in need have the funds. This is certainly a justification for not applying, just so you have thought this through for yourself and your business.  When this program is gone, we see it as highly unlikely it will be renewed on such generous terms.

Every businessperson has their hands full right now, navigating the shoals of uncertainty and change the COVID crisis has presented, but this program almost certainly is well worth your time and attention.