Paycheck Protection Program Break Down: How to Secure FundingApril 6, 2020
Consumers Energy President and CEO Patti Poppe opened the webinar with resources from Consumers along with Chamber President and CEO Sandy K. Baruah, who highlighted the Chamber’s role in providing resources to businesses through the Chamber’s COVID-19 Tele-Town Hall Series and Business Resource Center.
The program, part of the larger federal CARES Act, can help businesses cover payroll, mortgages, rent, utilities, and debt noted Dykema Member Alexis J. Schostak. Eligible businesses must have adhered to program qualifications before February 15 and have been impacted by COVID-19. The loans do not require personal guarantees or pledges of collateral.
For-profit businesses, 501(c)(3) enterprises, sole proprietors, independent contractors, self-employed individuals, veterans’ organizations, and tribal business concerns can all apply for PPP, explained Schostak. Businesses with more than 500 employees who are also SBA small business concerns may also be eligible.
Applications are currently open for small businesses and sole proprietors. Independent contractors and self-employed individuals can apply starting April 10, and the deadline to apply for all is June 30.
What Can PPP Loans Be Used For?
Generally, businesses can utilize PPP loans to cover the following expenses:
- Payroll costs
- Payments of interest (but not principal or prepayments) on mortgage obligations
in effect before Feb. 15
- Rent under a lease agreement entered before Feb. 15
- Utilities for which service began before Feb. 15
- Interest on any other debt obligations incurred before Feb. 15
The application process is relatively simple explained Kyle Sasena, the first vice president of Chemical Bank. Borrowers should work with their primary bank and gather the appropriate documentation to begin the process as quickly as possible, she continued.
TCF Bank recommends following these steps:
- Contact your bank on ways to apply.
- Gather the appropriate documentation including 2019 taxes, payroll registers, and 1099s.
- Complete the application, a process that generally takes less than 20 minutes.
- Wait for the disbursement. Your bank will try to process this as quickly as possible.