Following up on our last discussion of COVID-19 disaster relief loan programs available to Florida businesses, we now have more guidance from the SBA and others on the contours of the Payroll Protection Program created by the enactment of the CARES Act.
PPP Applications Open April 3
The SBA has now made the PPP application available, and applications open Friday April 3. Be sure to check out the government’s Paycheck Protection Program (PPP) Information Sheet for Borrowers, as well as the U.S. Chamber of Commerce’s helpful Small Business Guide and Checklist. Applications will be open through June 30, but it is expected that the money will run out, so businesses are encouraged to apply as soon as possible. (Note — the PPP program is also available to the self-employed. We’ll do another post soon about that; those applications open April 10).
How to Get Relief Fast
PPP Applications will be processed by SBA-approved lenders. You should start by contacting the bank with which you already do business, and ask them about their application procedures. Please be patient — everyone is trying to figure out how to implement this quickly. Assume there will be hiccups.
Which program is best for me?
We talked about some of the pros and cons of the various programs in our earlier post, and with the further guidance issued yesterday we have more information. There are a lot of factors that go into which program makes the most sense to get you through this difficult time, the biggest of which requires you to have a good sense of how your business runs and what your payroll costs and expenses are versus other costs. There is no one-size-fits-all answer. We’ve prepared our own basic comparison of the two main Federal programs to help you analyze what may work for you. Note that you can apply for both and choose with loan to take once approved, but cannot ultimately take both loans. Please go to this page to sign up for our newsletter, and we will send you our comparison chart to get you started. Please do this even if you are already on our email list, because it will help ensure you get information specific to the current crisis. And please be patient, as it may take a few minutes for the email to send.
The Most Important Advice We Can Give — Free
If you take either of these loans, please be sure to place the loan proceeds in a separate account from your usual business operating account. The use of the funds is limited to specific purposes, and using them for any other purpose could be a Federal crime. Protect yourself by segregating the funds and using them carefully. You must also account for the funds to be able to apply for forgiveness.