New Small Business Owner PPP Loans | You have to know
James Beckwith, President and CEO of Five Star Bank, says it is now time to prepare for the payment protection program loan applications.
SACRAMENTO, Calif. – Small business owners struggling to stay afloat receive $ 900 billion in support from the latest stimulus package.
Legislators have allocated more than $ 284 billion in forgivable payment protection program (PPP) loans to small businesses.
Melissa Sherwood had to close the doors of her Stockton salon for the third time since the coronavirus pandemic began three weeks ago and still doesn’t know when she will be able to reopen in view of the stay-at-home order being extended.
“Our livelihoods are damaged, our families are hurt, everything we’ve worked for is taken away from us when it’s not our fault,” said Sherwood, owner of the Tocco Divino Salon.
As a salon that mostly rents out chairs, they were not eligible for the first round of PPP loans and only got a small loan from the City of Stockton that is long gone.
Sherwood believes she’s finally eligible this time, but says she already feels overwhelmed by the paperwork.
“I actually stopped reading it because I thought I don’t know, that’s scary because you don’t want to do it with excitement only to find out that you don’t follow the rules and now you have all the money, that you have to pay back and still we can’t work, “she said.
James Beckwith, President and CEO of Five Star Bank, based in Roseville, said his team secured more than 1,100 loans the first time and recommends anyone contact their bank now to get the process started.
“Be prepared because when it comes out it gets quick and furious,” Beckwith said.
Although he believes applications won’t be accepted until mid-January, he says you have until March 31st to apply. You must have fewer than 300 employees and you cannot be a public company. And you also need to demonstrate a 25% decrease in quarterly sales compared to the same quarter last year.
“It really takes this quarter of 2020, you choose, calendar quarter versus the same calendar quarter of 2019. So it’s not as difficult as you might think,” he said.
To get credit, Beckwith says all business owners need to do is pay attention to how they are spending the money.
“That means you have to spend at least 60% of that PPP loan on payroll and 40% on other expenses,” he said.
Loans will be capped at $ 2 million instead of $ 10 million as it was in the spring.
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