Hannis T. Bourgeois Shares Payroll Protection Details
NEW ORLEANS – From Hannis T. Bourgeois:
]The Small Business Association (SBA) has released a sample application and information fact sheet for the Payroll Protection Program Loans (PPPL). The PPPL are available starting on Friday, April 3 for businesses and Friday, April 10 for self-employed individuals. They are available to businesses and 501(c)(3) nonprofits with less than 500 employees. The loans are also available to sole proprietors, independent contractors, and other self-employed individuals.
These loans will be provided for two and a half times your average monthly payroll, which includes wages and eligible benefits for employees, with wages capped at $100,000 per employee. For example, if your payroll and benefits are an average of $10,000 per month, the maximum loan amount is $25,000. The loan will be completely forgivable if used for payroll, rent/mortgage, utilities and other eligible expenses. Forgiveness of non-payroll expenses may be capped at 25% of the principal loan amount.
A copy of the application and fact sheet provided by the SBA can be found at sba.gov. Time will be of the essence for the PPPL, so please be prepared to contact your banker as soon as possible to determine if they will be underwriting these loans. The loans are only available through your local bank and not the SBA website.
If these loans do not meet your short-term cash needs, Economic Injury Disaster Loans (EIDL) are also available. The SBA is providing a $10,000 advance for these loans, which will become a grant even if the loan is not approved. An eligible applicant will be a business, Co-Op, or ESOP with not more than 500 employees; individuals who operate under a sole proprietorship, with or without employees, or as an independent contractor; businesses with more than 500 employees that are small under SBA Size Standards found at sba.gov/size-standards; or a private non-profit organization that is a non-governmental agency or entity that currently has an effective ruling letter from the IRS granting tax exemption under sections 501(c),(d), or (e) of the Internal Revenue Code of 1954, or satisfactory evidence from the State that the non-revenue producing organization or entity is a non-profit one organized or doing business under State law, or a faith-based organization. The maximum loan amount is $2 million.
A taxpayer could have an EIDL and a PPPL, so long as they are not both requested for the same expenses or used to pay the same expenses. EIDL loans made after January 31, 2020 for payroll purposes may be refinanced by PPPL. EIDL loans can be applied for on the SBA website here.
If your business has been impacted from the COVID-19 closures and stay at home mandates, we would be more than happy to share what we know about these programs so you can make informed decisions.