What can you not do with a PPP loan?
Don’t: Spend your PPP money on ineligible expenses
That means using the bulk of your funds (at least 60%) on payroll costs, such as salaries, hourly wages, paid sick leave and group insurance benefits.
What are the new rules for PPP loan forgiveness?
The “60/40 split” is still in effect: To receive maximum loan forgiveness, borrowers must spend at least 60% of their loan on eligible payroll costs, and no more than 40% on eligible non-payroll costs. SBA wrote in an interim final rule: “At least 60% of the PPP loan proceeds shall be used for payroll costs.
What can PPP loan be used for?
Generally, PPP funds can be used for four purposes: payroll, mortgage interest, rent/lease, and utilities. Payroll should be the major use of the loan. The second stimulus bill also introduced four new categories of expenses that are allowed.
How do PPP loans get forgiven?
Paycheck Protection Program (PPP) borrowers may be eligible for loan forgiveness if the funds were used for eligible payroll costs, payments on business mortgage interest payments, rent, or utilities during either the 8- or 24-week period after disbursement.
Can I use my PPP loan to pay myself?
You can use the PPP funds to pay yourself through what’s called owner compensation share or proprietor costs. This is to compensate you for a loss of business income. To take the full amount of owner compensation share, you will have to use a covered period of at least 11 weeks weeks.
Do I need a separate bank account for PPP?
Do: Keep separate bank accounts and consider getting a second business bank account for a PPP loan. Commingling business and personal expenses generally isn’t a good practice.
Can you go to jail for 20 000 PPP loan?
If the lie on your PPP loan is counted as deceiving a financial institution to profit, then you can be charged with bank fraud under U.S. Code Title 18 U.S.C. 1344. … Typically, for an individual facing a misdemeanor for this crime, the bank fraud punishment can be up to one year in jail and up to $4000 in fines.
What counts as payroll costs for PPP?
What counts as “payroll costs”? Payroll costs under the PPP program include: Salary, wages, commissions, tips, bonuses and hazard pay (capped at $100,000 on an annualized basis for each employee)
What can I use my PPP loan for as a sole proprietor?
Forty percent or less of the loan can go towards other eligible expenses, including business mortgage interest payments, business rent or lease payments, business utility payments, covered operations expenditures, covered property damage costs, covered supplier costs and covered worker protection expenditures.
What can PPP loan be used for self employed?
The 60/40 rule states that 60% of your PPP loan must be used on payroll costs, and the remaining 40% can be used on other eligible expenses (rent, mortgage interest, utilities, etc.). However, as a self-employed worker, you can claim all 100% of your PPP loan as payroll under compensation replacement.
Does a PPP loan have to be paid back?
Borrowers can apply for forgiveness after they have spent all of the loan money they want forgiven. … For PPP loans issued after June 5, 2020, borrowers are given six months to spend the cash. They don’t have to start repaying the loan until 10 months after the spending period ends.