Payroll Protection Program (PPP) Loan Forgiveness
As a part of the $2 Trillion CARES Act, the SBA is authorized to lend $349B to small businesses impacted by the COVID-19 economic impact.
The primary program for small businesses through the CARES Act will be the Payroll Protection Program (PPP). The PPP encourages small business owners to maintain historical employment levels by providing funding for payroll and other specific operational expenses. The application process is getting finalized but it will be streamlined to get funds into small business owner's hands and maintain employment.
One of the primary features will be that if employers maintain or re-establish employment levels to historical levels, that portion of the loan proceeds will be forgiven. That's right, there will be no repayment on those proceeds. Additional proceeds may also be forgiven that went towards utilities, mortgage interest/rent, and few other types of operating expenses.
These proceeds are expected to move very quickly and there are lenders getting systems in place to streamline the application and submission process. As with any government program there are some nuances and timing issues.