The Coronavirus pandemic has changed life and business throughout the world. Survival is on the mind of all small business owners that are lucky enough to have their businesses deemed as essential. The Paycheck Protection Program has been the saving grace for many businesses across the United States. As the owner of a business you understand your responsibility to keep your staff employed and paid during this time. Without revenue coming in due to social distancing restrictions this would be impossible without the PPP.
Finding SBA loans with CPA assistance can be wise as accountants understand the intricacies of filling out government paperwork. The first funding of this program was used up by businesses throughout the country in a matter of days. There has been additional funding granted after a disagreement and both parties trying to add other aspects to the bill before passing it.
Why the PPP was Created
The Coronavirus hit the world with incredible force leading many businesses to close their doors. Nobody could have predicted the way life would come to a halt. The Paycheck Protection Program was created in order to help reduce the impact that the pandemic has had on business. The fact that these loans can be forgiven make them very valuable to companies that are just getting by currently.
Tips for Managing this Money
Getting the money from the government to help keep your business running can be a monumental day. Put these funds into a separate bank account that is solely for costs that keep the business running. The money can then be used for wages, rent, and other debts that the business has incurred. Most expenses are put on automatic draft so this can help keep the business running smoothly.
The importance of keeping documents organized is paramount in order to comply with the loan’s terms. There is a chance that your loan qualifies for forgiveness of the entire amount if over 75 percent of the funds are used for employee wages. Payroll costs can also include benefits that are provided to full-time employees. Below are a few examples of benefits that can be paid out:
- Paid time off can be included as can sick leave.
- Severance can be paid out if layoffs were unavoidable.
- 401K contributions can be paid as well.
Small business loans that are given out by the government due to hardships the pandemic has created are of utmost importance. A business that has taken years to build shouldn’t be destroyed due to factors outside of the control of the company. Look into the PPP to help keep your business afloat and to make sure that your employees are taken care of. Businesses that survive this tough time are sure to flourish when life return to normal. Look into your options if you own a small business as the funds you are given could give the business time to recover.