Governments around the world are taking appropriate measures to keep their small businesses safe and running in these testing times of the pandemic.
The Paycheck Protection Program is one of many efforts made by the US government in an attempt to help businesses support their employees.
Do You Qualify For The Program?
The PPP loans are more inclusive and lenient when compared to other disaster relief loans. Lots of different types of small businesses, and skilled people working independently also fall under this program. So, it is most likely that you will qualify for this program easily.
How Can I Use The Funds?
As the name of the program already suggests, you will need to find your paychecks with at least 60% of the total money coming from the program. The rest amount can be spent on utility bills, rent payments, and mortgage interest payments.
If you follow all the guidelines, you will be able to get a 100% off on your loan. So, it will be a tax free grant for your business.
However, of you go against the rules and misuse the fund, you will face a PPP loan fraud lawsuit, and you will have to pay heavy fines.
What Can Be Included in The Payroll Costs?
- You can pay up to $100,000 to one employee each year. This can include his actual pay, tips, bonuses and so on.
- You can also pay for the employee benefits with the help of money you receive in the PPP.
- You can also pay taxes.
This should include most of the payroll processes. But payments to independent contractors and S corps and C Corps owners are not included in the plan.
So, following the rules can easily save you from lawsuits and fraud investigations.