A paycheck protection program is a loan program designed with the intention of strengthening the financial stability of most businesses in the United States of America. The Coronavirus Aid, Relief, and Economic Security (CARES) Acts present itself as the origination of the paycheck protection program (PPP loan). The primary goal and objectives of this loan program are to assist and support small businesses in America.
This loan program used to be a three hundred and fifty billion dollar program until it was expanded to an approximate amount of six hundred and sixty billion dollars. The expansion of the former funds was due to the Paycheck Protection Program and Healthcare Enhancement Act in April. The expansion of the loan program funding did not come to halt but was further increased by the addition of two hundred and eighty billion dollars.
That was however the latest expansion referred to as a second Paycheck Protection Loans (PPPL) for only businesses that have experienced a thirty percent reduction in revenue. It is also for businesses that have exhausted their first Paycheck Protection Program loan.
A paycheck protection program, popularly abbreviated as a PPPL program, is an economic relieving program to keep businesses afloat. The administration of a paycheck protection program is anchored, harnessed and controlled by the Small Business Administration (SBA). The administration of this program—that is, the paycheck protection program—is however supported by the Department of Treasury in the United States of America.
Generally, a PPPL (Paycheck Protection Program Loan) is specifically designed to reduce the burden of various businesses in America. It offers cash-flow support to small businesses for about eight weeks through a federally guaranteed loan (a hundred percent). Sixty percent of this cash-flow assistance is primarily used to fund payroll costs. It is also used to fund employee benefits costs.
The payroll costs that make up sixty percent of a Paycheck Protection loan include salaries, wages, commissions and hazard payments.
The remaining forty percent of a Paycheck Protection Program Loan can be used for several purposes. These purposes include the following:
– Costs of goods and services (that is supplier’s costs)
– Loss and damages of various forms of properties that are not covered by insurance
– The payment of lease and rents
– The payment of mortgage interest rates
Generally, a Paycheck Protection Program is designed for “small businesses” in the United States of America; but what must the business have to be eligible for this loan?
A small business will be eligible for this loan to maintain its financial stability if it:
– has not more than five hundred employees
– meet the Small Business Administration (SMA) size requirements
You can however be eligible for this loan without owning a small business or firm. To make it happen, you must be a sole proprietor and independent contractor; which sum up to being self-employed.