Source: https://www.sba.gov/

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

You got your loan. Now the question becomes; how do I apply for forgiveness?

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60% of the forgiven amount must have been used for payroll).

PPP loans have an interest rate of 1%.
Loans issued prior to June 5 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 years.
Loan payments will be deferred for six months.
No collateral or personal guarantees are required.
Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:

    •   Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
   •   Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the 24-week period after receiving their PPP loan
   •   Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
   •   Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
   •   Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined

When in doubt, consult a CPA to get opinion on your situation. At Zhong & Sanchez, we provide One-Stop-Shop Tax, Finance, Accounting and HR services for Startups and Entrepreneurs. We do it all, so you can stay focused on your business. Our experience in tax and accounting will free you from back office work; our extensive knowledge with start-ups will help you grow in the most efficient way. Located in the Silicon Valley, you can reach us at 510-606-6971 or schedule your first consultation today at https://calendly.com/zhongsanchez