President Joseph Biden has made a lot of changes since taking office in January. Recently, it has been announced that Biden is changing some of the Paycheck Protection Program rules. For two weeks, only businesses with fewer than 20 employees can claim pandemic relief loans. This restriction is set to last until March 10, 2021. Read on to learn more about PPP and the temporary restrictions.
PPP stands for Paycheck Protection Program. As of April 3, 2020, small businesses can now apply for these loans, while independent contractors and self-employed individuals were allowed to apply on April 10, 2020. These loans should cover small businesses’ payroll and other designated expenses. But, it is important to note that not all small businesses can apply for PPP. According to Business Insider, “business owners with non-fraud felony arrests or convictions in the previous year are excluded from the program.” That being said, the Biden administration officials are working to remove this restriction, unless the applicant is currently incarcerated.
If you own a small business, under PPP, you may borrow up to 250 percent of your average monthly payroll expenses, not exceeding $10 million. This should cover up to eight weeks of payroll expenses, as well as payments for certain debt obligations your business may have incurred.
The amount of the forgivable loan’s principal after 8 weeks is equal to the sum of the following expenses:
Payroll, including your employee’s salaries up to an annual rate of pay of $100,000, hourly wages and cash tips, group health insurance premiums, and paid sick or medical leave.
Existing interest payments on mortgages
Utility service agreements
For two weeks, only businesses with fewer than 20 employees can claim pandemic relief loans. According to Business Insider, “The changes are designed to make it easier for businesses with no employees — sole proprietors, independent contractors, and self-employed people such as house cleaners and personal care providers — that previously could not qualify because of business cost deductions.” Our firm will keep you updated on the PPP restrictions, when they are lifted, how you can apply, and more.
If you are struggling financially, speaking with an experienced bankruptcy attorney may be your best option. Contact our firm today to speak with an experienced and dedicated attorney. We are here to advocate for you and make sure you are on the right track.
Juan C. Velasco, Esq. is a trusted attorney who concentrates on bankruptcy, family law, real estate, and estate matters who has been serving the New Jersey area for over 25 years. If you are in need of experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.