The COVID-19 pandemic has thrown some business owners in turmoil. It’s unfortunate but possible that your staffing firm has been affected as well. On March 27, 2020, Pres. Donald Trump signed the CARES act. The CARES act is designed to give the Small Business Administration the ability to provide needed aid to small businesses like yours. Acceptance into the (7) Paycheck Protection Program means that your small business may get a loan amount equal to the lesser of 2.5 times your monthly payroll times 12 or $10 million. The CARES act outlines requirements that determine how funds administered by PPP Paycheck Protection Program SBA loans can be used by your staffing firm. A four percent fixed interest rate may be applied. However, there are no loan fees. The loan also may be eligible for tax-free debt forgiveness if your small business meets specific criteria.
Requirements For Paycheck Protection Program SBA Loans Forgiveness?
If your staffing firm meets certain requirements, eight weeks after receiving the loan, you may apply to receive 100 percent loan forgiveness.
The loan amount may be fully forgiven if the use of funds includes payroll, rent, utilities, and mortgage. Your staffing firm may also need to maintain the same number of employees. A nice bonus is that debt forgiveness in the past was seen as taxed income, but in this program, the government offers you tax-free debt forgiveness.
COVID- 19 Relief For Staffing Firms: Determining Eligibility For (7) Paycheck Protection Program
After hearing about this program and the benefits it offers, you may be eager to confirm your eligibility and apply. But you have to meet certain criteria.
(7) Paycheck Protection Program eligibility for staffing firms requirements include:
- You must meet the SBA’s size standards for a small business
- Sole proprietors will need to submit a schedule C form that confirms their net profit from the sole proprietorship
- Independent contractors must submit form 1099 MISC and their Schedule C
- Self-employed individuals will need their IRS payroll tax filings
What Is the Application Process ?
Although the CARES act outlines the guidelines for acceptance into the (7) Paycheck Protection Program, you will still need to receive the funds by visiting SBA approved lenders. Additionally, there are other important details you will have to disclose. The application for the PPP Paycheck Protection Program will ask you to verify:
- The economic uncertainties you are facing that make the loan necessary.
- The funds will retain workers and maintain payroll and cover mortgage, utilities, and lease payments.
- That you have not and will not get a different loan under this program.
- Proof of the number of full-time employees you have on the payroll and the amount you spend on payroll, mortgage payments, utility payments, etc.
- Acknowledgment that the lender will use the tax documents you submitted to determine your loan amount, and the documents you submit to the lender are the same as those you have submitted to the IRS.
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