5 Tips to get “Free Money” from the $2-Trillion Stimulus Package

5 Tips to get “Free Money” from the $2-Trillion Stimulus Package

On March 27th, President Trump signed the $2Trillion stimulus package for small business owners (sole proprietors or firms with fewer than 500 employees) to get two and a half months’ expenses in a lump-sum payout. The loan could possibly be forgiven depending on how you spend it.  I’ve never seen a loan program option as good as the PPP!

  1. The PPP package is better: PPP stands for the Paycheck Protection Program.  The PPP is better than the SBA (Small Business Administration) loans because there’s no creditworthiness, no 3-years of tax returns are required and interest is forgiven if you spend it on “qualified expenses”.
  2. Call your bank: All banks must participate however some will do a better job than others.  Once approved you should have the money in 1-5 business days.  The 4-page PPP application was just released by the IRS.  Online applications are expected to kick off on Friday, April 3rd!
  3. The formula: is based on your business’ average expenses over the last 12 months including payroll (salaries up to $100k), health insurance premiums paid and 401(k) match.  The monthly average is then multiplied by 2.5 = your lump-sum loan.
  4. Qualified additional expenses: You can spend it on utilities, internet, payroll, interest, rent, cash tips, tax on employee compensation, sick leave and sole prop salary up to a $100,000 cap per person.
  5. Numbers and exclusions: The maximum loan amount is $10 million.  Interest rates may range between 0.5% to 4% on any non-qualified expenditures made with loan monies. The beauty of this program is if you spend the loan proceeds on qualified expenses the loan may be forgiven, hence ‘free’ money if no more than 25% of the forgiven amount is spent for non-payroll costs.  You will also owe money if you do not maintain your staff and payroll. Keep in mind, you must spend all of the funds received in 8-weeks!                                    

     Folks this is an opportunity to keep businesses afloat and people employed; take advantage of it and be Safe! 

Feel free to reach out to me for the PPP loan application!