Here are some of Inc. readers’ most-asked questions about applying for loans through the Paycheck Protection Program.
Friday, April 3 was the first day small businesses and sole proprietors could apply for Paycheck Protection Program (PPP) loans. That day, Inc. editor-at-large Kimberly Weisul spoke with U.S. Chamber of Commerce executive vice president and chief policy officer Neil Bradley as part of the National Small Business Town Hall webinar series. Here are some of the most popular questions Inc. readers submitted during the town hall, along with answers from Bradley and other experts.
1. Which lenders are accepting applications for PPP loans?
The loans are being made available using a tiered rollout system, with traditional Small Business Administration lenders being the first institutions that can accept applications. Other financial institutions–including credit unions, Farm Credit System institutions, and Community Development Financial Institutions (CDFIs)–are now in the process of being added and will begin accepting applications in the coming days–if they haven’t already.
2. Does the loan application have to be filled out in person or can it be done online?
The form can be submitted online, either on the institution’s website or via email. Contact your existing institution or visit its website to find out the preferred method.
3. Can I apply for both a PPP loan and an economic disaster injury loan (EIDL)?
You can apply for both, but you cannot use both loans to cover the same expenses.
4. Can I include 1099 workers in my payroll calculations for the PPP loans?
No. Independent contractors and other 1099 workers can apply for their own PPP loans beginning April 10.
5. Is there a risk that our bank will be out of loan money by the time I apply?
Yes. For this reason, you should apply as soon as possible. Wells Fargo, for example, announced on Sunday that it had already stopped taking PPP applications after hitting its $10 billion capacity. Check with your existing bank first, and if it isn’t accepting applications you can try other lenders as well. If the PPP’s $349 billion in loans runs out, Bradley expects that Congress will pass legislation to add more funds.
6. What if I laid off employees and they already filed for unemployment benefits? Would we need to have them stop receiving unemployment in order to get the loan?
If you offer to re-hire an employee, they will no longer be eligible for unemployment benefits since they now have the option of accepting a job.
7. Can I use the PPP to pay new hires or increase pay for existing employees? How will this affect the amount I’m forgiven?
Yes. Keep in mind that the size of the loan and amount of forgiveness are both capped at $100,000 per employee on an annualized basis. Your loan is eligible for full forgiveness so long as you use at least 75 percent of it on payroll.
Author: Kevin J. Ryan
Source: INC: Your Latest Stimulus Loan Questions, Answered