Last updated: April 17th, 2020
Update 4/17/2020: The Paycheck Protection Program funding has run out. We will continue to watch for developments and update this post as officials make announcements.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides payroll relief for small businesses in the form of the Paycheck Protection Program (PPP). If your retail business has fewer than 500 employees and has been impacted by COVID-19, you’re eligible to apply for one of these loans. And, if you follow some simple guidelines, the loans can be forgiven.
Intuit has created a comprehensive guide to understanding the program and is launching a tool to simplify the process of applying for the program. This is what you can expect if you decide to embark on this journey.
About the Loan
The Paycheck Protection Program was launched as an incentive for small businesses to continue paying their employees. If the business uses the loan for payroll costs, interest on mortgages, rent, and utilities, it will likely be fully forgiven, at least in part, by the U.S. Small Business Administration.
Small businesses that meet the SBA’s size requirements, sole proprietors, independent contractors, and self-employed persons are among those who are eligible for the loan. Nonprofits, veterans’ organizations, and tribal concern businesses may also apply. You may download the PPP application form to see the information that will be requested from your lender.
How to Qualify
There are a few requirements for total loan forgiveness, so be sure to follow these steps to increase your chances.
- Maintain Your Workforce. If your business was open last year, keep the same number of employees on payroll that you had between February 15th and June 30th. If not, maintain the headcount you had between January 1st and February 15th of this year. You can lay off employees, but they must be rehired by June 30th, 2020 in order for your loan to be forgiven in full.
- Keep Salaries & Wages Steady. The PPP covers up to $100,000 per year per worker of payroll, so business owners are advised to maintain salaries and wages. Reductions of more than 25% decrease your chances of loan forgiveness, so if this is already something you’ve done, you can restore those wages.
- Record Loan Spending Information. Qualifying for loan forgiveness will include providing proof of how you spent the loan. Be sure to keep an accurate record of how much went to payroll, benefits, mortgage, rent, utilities, and the like.
- Use At Least 75% of the Loan for Payroll. The most recent recommendation from the SBA is to spend no more than 25% of the loan on non-payroll related expenses.
Applying via QuickBooks
Intuit is currently developing a native tool for QuickBooks customers to apply for payroll protection through the QuickBooks site. Up to $10 million will be distributed to cover payroll and employee benefits, and you can apply for loan forgiveness after eight weeks.
Other Options for Small Businesses
Small business owners who do not wish to apply for the Payroll Protection Program (or who do not anticipate the ability to have the loan forgiven) have plenty of other options to keep their businesses afloat during the global pandemic. The SBA offers disaster assistance loans of up to $2 million with low interest rates. There are also loan advances of up to $10,000 for businesses that need immediate assistance.
Many large corporations are providing relief at this time as well. Amazon’s Neighborhood Small Business Relief fund will distribute $5 million, Facebook will distribute $100 million to 30,000 small businesses worldwide, and Intuit has partnered with GoFundMe to facilitate the connection of donors and small businesses in need. Additionally, there are industry-specific grants and local government funding.