Paycheck Protection Program (PPP)
US Govt. has started a Paycheck Protection Program under the CARES act. Any business having up to 500 employees or less would be eligible to get funding as a loan from SBA equivalent to 2.5 times the monthly payroll of a small business. This funding is for the paycheck protection of employees for 8 weeks. The loan will be forgiven if it is used for keeping the employee’s jobs and other expenses such as rents, mortgages, utilities, telephone, and internet. However, the total expenses besides the payroll can not be more than 25% of the total funds. The program has been started on 4/3/2020. A business will have to work with a bank approved by SBA. The purpose of the PPP program is to avoid massive layoffs of employees from small businesses all over the country. Due to the spread of coronavirus, most of the state governors have shut down nonessential businesses. All domestic and international travels have been canceled. Travel, Hotel-Motel, and restaurants businesses have been hit hard financially and almost have no business. If the Govt. doesn’t provide such aid as PPP, most of the small businesses would have to file bankruptcy.
Some of the documents needed for completing the PPP application are:
2019 941s and 940. 2020 941 for the 1st qtr.
2019 1099 Misc and 1096
2019 W3 and W2s
2019 state taxes paid by the employer
Records of various expenses such as retirement plans, medical insurance, paid sick leave, paid family leave.
