Loans can be up to 2.5 x the borrower’s average monthly payroll costs, not to exceed $10 million.
How do I calculate my average monthly PAYROLL COSTS?
INCLUDED Payroll Cost:
1. For Employers: The sum of payments of any compensation with respect to employees that is a:
2. For Sole Proprietors, Independent Contractors, and Self-Employed Individuals: The sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in one year, as pro-rated for the covered period.
EXCLUDED Payroll Cost:
NON SEASONAL EMPLOYERS:
Maximum loan =
2.5 x Average total monthly payroll costs incurred during the year prior to the loan date
For businesses not operational in 2019:
2.5 x Average total monthly payroll costs incurred for January and February 2020
Maximum loan =
2.5 x Average total monthly payments for payroll costs for the 12-week period beginning February 15, 2019 or March 1, 2019 (decided by the loan recipient) and ending June 30, 2019
About the Coronavirus Aid, Relief, and Economic Security (CARES) Act
The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program (PPP), the initiative provides 100% federally guaranteed loans to small businesses.
Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward. The administration has released initial guidelines; they are available at www.treasury.gov.
Small businesses and sole proprietors can begin applying on April 3.
Independent contractors and self-employed individuals can apply beginning on April 10.
Source: U.S Chamber of Commerce Coronoavirus Emergency Loans Small Business Guide & Check List
Additional Paycheck Protection Program Resources: