Americans continue to feel the financial trauma from the COVID-19 pandemic, leaving the federal government to respond with a multi-trillion dollar economic relief package.
The $2 trillion CARES Act contains two major government mandates in the form of a payroll protection program and a small business administration loan.
“The beautiful thing about the Senate Payroll Protection Program, or the PPP, (is) debt forgiveness, so essentially they’re going to give you in a very simplistic terms, two and a half times your average monthly payroll, and if you use that loan for the first eight weeks for payroll, they’re going to forgive that loan and you don’t have to pay it back," said Lynn Keck, tax partner at The Bonadio Group.
If your business qualifies, Keck says you can apply for both. The banks will be accepting PPP applications by Friday, whereas the SBA forms can be found online and take about twenty minutes to fill out.
“Even if you don’t get access to the PPP loan or the idle loan there is an ability to defer your payroll taxes and there’s also ability to potentially receive a credit,” Keck said. “So what we’re telling people is the government is giving you essentially the ability to pay your people for eight weeks, utilize it. The goal is when we come out of this pandemic, and when we come out of this situation that we will have people ready to go at our businesses and won’t have to go through the-hidings that they’ll be ready to go and help us move to
the next stage of this crisis.”
There are multiple avenues of relief and because of the demand, the best advice is to apply sooner than later.