Your Last Stimulus Loan Questions, Answers
Friday April 3 was the first day small businesses and sole proprietors could apply Paycheque Protection Program (PPP) loans. That day, Inc. Editor-in-Chief Kimberly Weisul spoke with U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley as part of the National Small Business Town Hall webinar series. Here are some of the most common questions Inc. readers submitted during the town hall, as well as the responses of Bradley and other experts.
Inc. and the House will hold its third city hall in the series on Friday, April 10 at 12 p.m. EST. Registration is now open.
1. Which lenders accept PPP loan applications?
Loans are made available using a tiered deployment system, with traditional Small Business Administration lenders being the first institutions to accept applications. Other financial institutions – including credit unions, agricultural credit system institutions, and community development finance institutions (CDFIs) – are currently being added and will start accepting applications in the coming days – if they haven’t already.
2. Does the loan application have to be completed in person or can it be done online?
The form can be submitted online, either on the institution’s website or by email. Contact your existing institution or visit their website for the preferred method.
3. Can I apply for both a PPP loan and a economic disaster loan (EIDL)?
You can apply for both, but you cannot use both loans to cover the same expenses.
4. Can I include 1099 workers in my payroll calculations for P3 loans?
No. Independent contractors and others 1099 workers can apply for their own PPP loans from April 10.
5. Is there a risk that our bank will run out of loan money when I apply?
Yes. For this reason, you should apply as soon as possible. Wells Fargo, for example, announced on Sunday that it had already stopped taking PPP applications after reaching its capacity of 10 billion dollars. Check with your existing bank first, and if they don’t accept requests, you can try other lenders as well. If the $ 349 billion in PPP loans run out, Bradley expects Congress to pass legislation to add more funds.
6. What happens if I fire employees and they have already applied for unemployment benefits? Should they stop receiving unemployment to get the loan?
If you offer to rehire an employee, he will no longer be entitled to unemployment benefits since he now has the possibility of accepting a job.
7. Can I use the PPP to pay new hires or increase the salary of existing employees? How will this affect the amount forgiven me?
Yes. Keep in mind that the loan amount and the forgiveness amount are both capped at $ 100,000 per employee on an annualized basis. Your loan is eligible for full discount as long as you use at least 75 percent of it on payroll.
Frequently asked questions from the past week can be found here.