If your business was open on or before February 15, 2020 and has 500 or fewer employees or independent contractors for whom the business paid salaries, compensation and payroll taxes, you qualify. Businesses with more than 500 employees are eligible in certain industries. One such example is the hospitality and food sectors that have multiple locations. These companies can have up to 500 employees per physical location.
If used properly, some or all of these loans can be forgiven but demand for these loans is quite high. In the initial round of loans, these funds dried up very quickly.
What makes these loans unique is that if you keep your employees hired, some or all of the loan will be forgiven. There are many parts to the calculation of the forgiveness, but the primary two are employee retention and at least 75% of the forgiven loan amount must be used for payroll. Even if you lay off employees, there are clauses that allow you to rehire those employees.
The rules and application of these rules change almost daily. Check with you Bank or visit the SBA website fro more up to date information.
Be sure to contact our office if you need any assistance with applying for these loans.
Written by: Doug Rodrigues