Complete Story
04/10/2020
Employer FAQs On Paycheck Protection Loans
Source: Fisher Phillips, April 8, 2020
The Coronavirus Aid, Relief and Economic Security (CARES) Act provides much-needed economic relief to businesses impacted by the COVID-19 crisis. However, this much-needed relief comes with great confusion, particularly for small businesses aiming to take advantage of the Paycheck Protection Program (PPP). While the Small Business Administration (SBA) has revised its sample PPP loan application, issued Interim Final Rules, Supplemental Interim Final Rules (which largely addressed the SBA’s complicated Affiliation Rules), and FAQs for borrowers, employers still may have many questions.
What do small businesses need to know if they are still unsure about the process? What if a small business already applied for a PPP loan under old SBA guidance? Fisher Phillips’ SBA Loan team answers the most commonly asked questions:
Determining Eligibility For A PPP Loan
What time period is used to determine a business’ number of employees for purposes of a PPP Loan?
These loans are available for businesses with not more than 500 employees. Although the plain language of the CARES Act indicates that the 500-employee count is determined at the time a borrower applies for the loan, the SBA’s recent guidance clarified that borrowers may use their average employment over the previous 12 months or the calendar year 2019.
For seasonal businesses, the period between February 15, 2019 or March 1, 2019 and June 30, 2019 may be used. If a business was not in business from February 15, 2020 to June 30, 2019, it may use the average monthly payroll costs for the period January 1, 2020 to February 29, 2020. Independent contractors are not included in the employee count.
