United States government has declared $ 349 billion small business capital to help businesses to sustain their operations amidst slowdown because of the Coronavirus pandemic.
Small and medium size software & SaaS companies are hit big time. If there is no support from the government to bring the normalcy, then this can have a cascading effect on the economy. Thankfully government has understood the issue and come forward to provide support to business to keep their operations running.
This entire package documentation is overwhelming for people to understand, so we have tried to put it into few simple steps.
How much your Business is eligible for?
Let’s suppose your firm’s payroll expenses for the last 12 months were 600k, then divide it by 12, and multiple by 2.5 that is the amount of money your company will be eligible for.
For example (600k in payroll/12 months)*2.5=1,25,000
In simple terms, government is providing two and half month’s salary funds for your firm.
Few simple steps to apply for COVID-19 Relief Paycheck Protection Program
-Fill this form in
-The government will open an online portal Friday (April 3rd, 2020) where you can submit Step 1 form plus items below. Gather them now so you’re ready to move quick.
– Show proof of revenues/expenses before Feb 15th 2020
– Gather your company EIN or TIN number, 2017 taxes, 2018 taxes
-2019 taxes (if not complete yet, 2019 Profit and loss broken down by month will work)
-You’ll need to provide documentation to the bank verifying the number of full-time equivalent employees on payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight week period starting when you get this loan.
These are loans on 10-30 year terms with under 4% interest rates
You do not have to pay interest, or the money back if you spend the loan on specific items (like payroll)
There is only $349 billion available, it’ll run out so you should apply quickly on Friday.
Your bank is the one that actually deposits the money in your bank account. The federal government has told banks it’ll 100% back that loan (this is why banks are happy to do it)
Special thanks to Nathan Latka for providing this crucial information.