It’s no secret that Coronavirus impacted businesses across the country in serious ways. After being forced to close their doors for a prolonged period of time, business owners knew they would need help keeping their heads above water. Fortunately, The CARES Act signed by the federal government in March 2020 provided relief in the form of business loans.
If you are a small business owner that took out a PPP loan with the federal government, you might be wondering how you will repay that loan in the future. According to the application, however, you might not have to. Here, we’ll discuss the PPP loan and how you can keep your funds without repayment.
What is the PPP Loan for Businesses?
The Paycheck-Protection-Program (PPP) is a federal loan created to incentivize business owners to keep their employees on payroll. Any money received from the PPP loan must be used for necessary expenses such as:
- Payroll
- Rent
- Mortgage payments
- Utilities
The loan amount a business receives depends on its size and needs. The average loan amount is 2.5x a business’s monthly payroll costs. The opportunity to apply for a PPP loan runs through July 6, 2020.
How Do You Apply for a PPP Loan?
To receive a PPP loan you must first apply with a qualified lender. If you are not sure whether your bank is a qualified lender, you can consult your financial advisor or a representative from the Small Business Association. Most qualified lenders require you to be a customer before you can apply for the PPP loan through them. There are a few banks, however, that allow non-customers to apply.
The application for the PPP loan is 11 pages long and requires data sets, charts, and financial records. If you intend to apply, it is in your best interest to talk to your accountant or financial advisor to ensure the financial affairs of your business are in order.
Are Businesses Required to Pay Back PPP Loans?
Within ten days of approval for the PPP loan, you will receive a paid-in-full, one-time disbursement from your lender. The PPP loan is unlike a traditional loan – your loan can be forgiven if you meet the terms of the agreement and use the funds for approved expenses.
In addition, businesses that receive loans of less than $2 million do not need to worry about an audit or proving their expenses to the federal government. This information is included in the loan application for all borrowers to see. If you are applying for the PPP loan, be sure to walk through the application and loan agreement page by page with your lender.
Trusted Debt Attorneys Who Fight for You
If your business is struggling to make ends meet in the midst of COVID-19 and your debts are going unpaid, a knowledgeable debt settlement attorney can fight for you. McCarthy Law provides access to debt settlement attorneys experienced in negotiation who will work in your favor to reduce and eliminate the balance you owe on your student loans.
The attorneys at McCarthy Law PLC are a trusted source of legal representation when it comes to student loan debt settlement. Under our debt settlement program you will only have to pay a fraction of the cost of what you owe on your student loans. To schedule a consultation with a knowledgeable and experienced debt settlement paralegal, call our office at 855-976-5777 or fill out an online contact form today.