One way the government has tried to help alleviate the effects of COVID-19 on small businesses is the Paycheck Protection Program (PPP.) While it has been around for quite a long time, there is still some confusion out there as to how it works. Several misconceptions have left business owners reluctant to take advantage of it. Mecham Dicus & Company is here to shed some light on some of these misconceptions.
Are PPP Loans Only for Big or Small Businesses?
Almost any business out there is eligible for the PPP. It doesn’t matter is you are an independent contractor, sole proprietor or self-employed, you will still be eligible for the PPP. In the beginning, there were some reports that big banks were prioritizing large loans. However, since, the government has taken action so small businesses have the chance to apply as well.
Can I Apply for PPP if I am the Only Employee?
It’s true that S corps and C corps aren’t eligible for the PPP. However, if you are an independent contractor or a sole proprietor and don’t have any employees on your payroll, you can still apply.
Can the PPP Can Be Used as a Low-Interest Loan?
The entire reason that the PPP was created was to ensure that workers wouldn’t have paychecks effected by the pandemic. It is in place to make sure that you don’t have to lay any of your employees off because you don’t have the ability to pay them. In fact, when you apply for the program, you are committing to use it for this purpose, and you are subject to fraud charges if the government learns that you used it for anything else.
Can You Receive Unemployment & PPP Loan at the Same Time?
It is important to understand that you won’t be able to double dip in the PPP and claim pandemic unemployment funds at the same time. There are serious consequences for trying to take advantage of both of these programs as the funds from both count as sources of income. After one or the other runs out, you can seek out assistance from the other.
Can You Get a PPP Loan if in Bankruptcies?
Anytime you can claim that your business has been affected by the pandemic, you are eligible to apply for the PPP. You don’t have to wait until things are so dire that your business is facing bankruptcy. You especially want to apply as soon as possible as funds are starts to quickly run out. However, if your entity is permanently closed, through bankruptcy or otherwise, it is not eligible for a PPP loan.
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If you have questions about the PPP and how it impacts your small business, you can contact the professionals at Mecham Dicus & Company to help you sort it all out. We can help determine whether or not you are eligible for any funds from this program to keep your business afloat. Call us today!