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Paycheck Protection Program Loans FAQ’s

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    What is the Paycheck Protection Program?

    The Paycheck Protection Program (PPP) is a $670 billion loan program established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law in March 2020, in an effort to minimize the economic impact of the COVID-19 pandemic on U.S. businesses and employees. The purpose of the Paycheck Protection Program is to provide an incentive to business owners to retain their workforce during COVID-19 by offering low-interest, forgivable loans to cover payroll costs and other eligible business expenses. Click for Paycheck Protection Program information.

    Do I qualify for a PPP loan?

    Many U.S. businesses qualify for funding through the Paycheck Protection Program, including certain small businesses that meet the Small Business Administration’s (SBA) size standards, self-employed individuals, sole proprietors, independent contractors, and certain nonprofit organizations, veteran organizations, and tribal concerns. PPP LOAN FAQ’s

    What is the deadline to apply?

    The initial deadline to apply for a PPP loan was June 30, 2020. However, on July 4, the president signed the program’s extension legislation, which reauthorized lending under the Paycheck Protection Program and extended the deadline until August 8, 2020. Read More FAQ’s

    Can I apply through multiple lenders?

    Applications for PPP loans are submitted directly to an eligible private lender, such as a federally insured bank or credit union, and there is no penalty for filing applications with multiple lenders. However, keep in mind that you cannot legally receive PPP loans from multiple lenders and any attempt to do so fraudulently could result in criminal charges for PPP fraud. Read More PPP FAQ’s

    How much funding can I receive?

    The amount of funding you can receive under the Paycheck Protection Program is based on your payroll costs. The loan amount is equal to 2.5 times your average monthly payroll costs, which can be calculated by adding up your payroll costs for all of 2019 and dividing this amount by 12. Read More FAQ’s

    What can I use PPP funds for?

    PPP loan proceeds can only be used to cover a few specific types of business expenses, including payroll costs, interests on mortgages, rent and lease payments, and utilities. Read More FAQ’s

    Is the loan forgivable?

    A PPP loan can be partially or fully forgiven so long as the business keeps its employees on the payroll (or quickly rehires employees who were laid off) and maintains employees’ salary levels. In order for the loan to be 100% forgiven, at least 60% of the loan amount must be used to cover payroll costs and employee healthcare benefits. The other 40% of the loan amount can be used for eligible business expenses. Read More FAQ’s

    What is covered under “payroll costs”?

    For the purposes of calculating a PPP loan amount or determining eligibility for loan forgiveness, the term “payroll costs” refers to the total amount of any compensation paid to employees. This includes salaries, wages, tips, bonuses and commissions, plus vacation pay, sick leave and other employee benefits. These costs are capped at $100,000 per employee. Read More FAQ’s

    How long is the window for loan forgiveness?

    When the Paycheck Protection Program was first introduced, there was only an eight-week loan forgiveness window and no money spent outside of that eight-week window was eligible for forgiveness. However, the Paycheck Protection Program Flexibility Act signed into law in June 2020 expanded the loan forgiveness window from eight weeks to 24 weeks, giving businesses more time to spend their PPP funds. The loan forgiveness period begins on the date the PPP funds are initially disbursed. Read More FAQ’s

    How can I get my loan forgiven?

    As a business owner, you can apply for and receive full or partial loan forgiveness in an amount equal to the amount of the PPP loan you can document that you used for qualifying expenses during the eight- or 24-week window following loan disbursement. At the end of the loan forgiveness period, you can apply to have the loan forgiven. Loan forgiveness will be reduced if your full-time headcount decreases or if salaries and wages are reduced. Read More FAQ’s

    What kinds of certifications accompany a request for loan forgiveness?

    In applying to have your PPP loan forgiven, you must certify that the documentation you have provided is true and correct and that the loan amount for which you are seeking forgiveness was used to retain employees and make payments for eligible business expenses. If your loan forgiveness application includes any bad-faith certifications, you could be charged with PPP loan fraud. Read More FAQ’s

    What happens if a portion of the loan is not forgiven?

    If your PPP loan is fully forgiven, it essentially becomes a grant. If the loan is only partially forgiven, however, the unforgiven balance will be treated as a loan and must be paid back. PPP loan payments will be deferred for six months from the date of disbursement and there is no collateral or personal guarantee required. PPP loans have a 1% interest rate and loans issued before June 5, 2020 have a two-year maturity, while loans issued after June 5, 2020 have a five-year maturity. Read More FAQ’s

    How is a PPP loan different from an SBA disaster loan?

    PPP loans are not the same as Economic Injury Disaster Loans administered by the SBA, better known as SBA disaster loans. For one, no personal or business collateral is required for PPP loans, while an SBA disaster loan may require collateral for loan amounts over $25,000. Second, only certain specified expenses are considered authorized uses for PPP funds, while SBA disaster loans cover most operating expenses. Third, you can have access to credit elsewhere and still qualify for a PPP loan, while an SBA disaster loan generally requires that you have no other source of credit. Finally, PPP loans can be forgiven, while SBA disaster loans must be repaid. Read More FAQ’s

    What if I fired employees or cut their salaries?

    The principal purpose of the Paycheck Protection Program is to keep U.S. workers employed and their salaries intact, which means firing employees or cutting salaries is contrary to the policy underlying the PPP loan program. In order to receive a PPP loan or qualify for loan forgiveness, you must either retain your workforce and maintain your employees’ salary levels, or, if you already fired employees or cut their salaries, you must rehire them and raise their salaries back to their prior level. Read More FAQ’s

    What is PPP loan fraud?

    PPP loan fraud is any attempt to defraud the Paycheck Protection Program. There are three main ways to commit PPP loan fraud:

    • By misrepresenting information on your loan application in order to fraudulently obtain PPP funds,
    • By misusing PPP loan funds (i.e. using the funds for unauthorized purposes), or
    • By fraudulently requesting forgiveness of a PPP loan.

    Read More FAQ’s

    Why are PPP loan fraud charges being filed?

    U.S. Attorneys have been directed to prioritize the investigation and prosecution of criminal offenses related to the coronavirus pandemic and the federal government is doing just that by cracking down on any attempt to use COVID-19 as an opportunity to defraud the Paycheck Protection Program. Since May 5, the Department of Justice has already criminally charged more than a dozen individuals alleged to have committed PPP loan fraud.

    Am I at risk for federal PPP loan fraud charges?

    If you are accused of fraudulently obtaining or misusing loan funds from the Paycheck Protection Program, you could face criminal prosecution for a federal offense. If you have questions about PPP loan compliance, or if you believe you may be at risk for federal charges related to PPP loan fraud, do not hesitate to consult an experienced federal criminal defense attorney. Read More FAQ’s

    What if I am the target of a PPP fraud investigation?

    With billions of dollars at stake in the Paycheck Protection Program, the Department of Justice has vowed to aggressively investigate and prosecute cases of PPP loan fraud. If you believe you may be the target of a PPP fraud investigation, you could end up facing charges for federal bank fraud, wire fraud, identity theft, making false statements to a financial institution, and/or making false statements to the SBA. The best way to protect yourself against these charges is to hire a knowledgeable PPP attorney as soon as you suspect that you may be involved in a fraud investigation.

    What is a PPP fraud federal indictment?

    A federal indictment is a legal document used by prosecutors to initiate legal proceedings in a federal criminal case. In order to bring criminal charges for alleged federal PPP loan fraud, the prosecutor must first obtain a federal indictment from a grand jury. Alternatively, if prosecutors need to make an arrest quickly, a federal criminal complaint can be used. Once an arrest is made on a criminal complaint however, the defendant must be charged by an indictment within 30 days. Read More FAQ’s

    How can a PPP attorney help?

    The federal government has ramped up efforts to root out abuse of the Paycheck Protection Program. However, not all cases of PPP fraud in the United States are based on intentional fraudulent activity. Filling out a government loan application, understanding how the loan is calculated, and ensuring that the funds are used properly can be complicated, and some business owners may be targeted by a PPP fraud investigation because of an honest mistake or misunderstanding. If you have been accused of committing PPP loan fraud, a reputable PPP attorney can help you fight the charges and clear your name. Read More FAQ’s

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    “About 3 years ago, I was in need of legal help. I was recommended to a different firm initially, but during my consultation realized I was being lied too so that with a sense of urgency, I would retain theyer services.  I left and did my own research and found Daniel Perlman. I decided to meet with him, who immediatly struck me as someone how knew what he was talking about.  He laid out all the different options for proceeding, and after defending me for about 4 months, got me the best possible outcome for my case.  Hes not the cheapest attorney, but being a small business owner, I understand that you get what you pay for, and with this firm, its money well spent.  I highly recommend his services and hope I never need them again.” – Rhett B.

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