In this time of economic uncertainty due to the coronavirus and the social distancing required to slow it, our attorneys and staff are helping New Jersey businesses seek financing under the new Federal Small Business Paycheck Protection Program. The basic elements of the program are below. Call us to obtain help. Applications are being accepted starting April 3rd, and funding is limited, so time is of the essence.
Small Business Paycheck Protection Program
The new Paycheck Protection Program by the Federal Government will provide small businesses with funds to meet payroll and benefits costs, payroll taxes, vacation and sick leave payments, rent, mortgage interest, and utilities for up to for up to eight weeks. If the funds are used solely for these expenses and the number of the business’s employees stays the same, the loan can be fully forgiven (it is expected that seventy five percent of the forgiven amount will go to payroll expenses). In other words, the loan is converted to a grant and does not need to be repaid. The requirement can be met by retaining employees or quickly rehiring them by June 30, 2020. If the number of full-time employees is reduced then the forgiveness will be reduced, and a pro rata portion of the loan will need to be repaid. Only one loan may be taken. The non-payroll costs need to have been incurred before February 15, 2020.