We are at a time when the global economy is struggling and businesses have been impacted significantly. It is extremely difficult for a business to stay afloat with the revenue it generates being affected. However, the recent authorization of the paycheck protection program by the government has provided a flicker of for many businesses looking to revive themselves during such a tough time. It is aimed towards bailing out business owners and their employees. Although it is a program that has been going on for some time, a significant percentage of the allocated funds is still available meaning that you are still in luck if you have not submitted your application yet. The application process may however be challenging to manage effectively especially if you are not familiar with how this landscape works meaning that you may have to learn a few things about paycheck protection program loans before you start the application process.
The paycheck protection program is a loan from the government that offers an incentive for businesses to keep paying their employees even during tough times. Unlike an ordinary loan, paycheck protection program loans give every business the eligibility for forgiveness provided that it meets the employee retention criteria. In order to be eligible for forgiveness, a company needs to use at least 60% of the paycheck protection program loan on payroll expenses. You also do not need to provide any collateral in order to receive the loan and you only begin payment after six months of getting the loan. It is also possible to spend the funds on other expenses other than the payroll costs such as utilities and rent. On this website, you will learn all you need to know about the paycheck protection program loan and the best way to apply for one.
The declaration of a public health emergency by the government caused many businesses to close without their own accord. This meant that every non-essential business should remain closed as long as their executive orders are still in practice. The government also realises how difficult the situation can be for employees that are forced to stay at home due to the emergency. Given that most of the closed businesses are not generating any revenue, it is only natural to cut on the payroll expenses meaning that laying off and furloughing employees were the only sensible options. The payroll protection program is a temporary solution aimed towards keeping businesses afloat and employees on the payroll until normal business operations resume. Check out this post that has expounded on the topic: https://en.wikipedia.org/wiki/Paycheck_Protection_Program.
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