U.S. Senate Candidate Bill Hagerty Explains the Payroll Protection Program
On Tuesday we heard from Bill Hagerty, candidate for United States Senate, and Hugh Queener, Chief Administrative Officer of Pinnacle Bank to learn about resources for small businesses in Tennessee.
Hagerty, who was once the Economic and Community Development Commissioner of Tennessee, acknowledged the resilience of small businesses across the state during these difficult times.
He stressed that while the information they were providing at the moment was current, it is a rapidly changing program and one should check with the Small Business Administration to get the most up-to-date information. The Payroll Protection Program was implemented just seven days after its passage.
For the most part, the information we provided on April 1st still holds true. Below are the key points found in our research and reinforced by Hagerty and Queener.
- The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
- The application opened for submission starting on Friday April 3rd, 2020.
- Loans can be made for up to two months of your average monthly payroll costs from the last year (plus an additional 25% of that amount).
- SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
- Hugh Queener said banks will generally want to see at least 75% of the loan going to payroll expenses. There are no official guidelines on this, however.
- Payroll costs are capped at $100,000 on an annualized basis for each employee.
- The Paycheck Protection Program will be available through June 30, 2020.
- This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veteran’s organizations.
- You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Download an application here to expedite the process.
- The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. No fees will be charged during this time.
The PPP will be offered in conjunction with Economic Injury Disaster Loans for companies that were affected by the tornado in Middle Tennessee. Check availability here.
In addition, Hugh Queener urged small business to get in contact with their local bank. Bankers have been working overtime to meet the needs of their customers.
Hagerty and Queener also emphasized that your application needs to be completely accurate in order to give your situation the best chance of approval. Queener mentioned the need for a “second wave” of PPP loans to ensure that all small businesses, whether it be five or five hundred employees, can take advantage of the program.
Hagerty provided these links for reference.
You may also call the Tennessee branch of the Small Business Administration at (615) 736-5881.
We hope this helps. Please let us know if we can guide you through the process. Take care and thanks for keeping the economy going.
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This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.