How Many Weeks Does the First PPP Loan Cover?
Contents
If you’re wondering how many weeks the first PPP loan covers, the answer is 24. That means that if you’re approved for a loan, you’ll have 24 weeks to use the funds to cover your payroll and other eligible expenses.
Checkout this video:
Introduction
The Paycheck Protection Program (PPP) is a loan designed to help small businesses keep their workers on the payroll during the COVID-19 pandemic. The PPP loan is forgivable if at least 60% of the loan is used for payroll costs, and the loan must be paid back over a two-year period. The maximum loan amount is $10 million.
How many weeks does the first PPP loan cover?
The first PPP loan covers eight weeks of payroll and other approved expenses.
What is the PPP Loan?
The Paycheck Protection Program (PPP) loan is a loan designed to help small businesses keep their employees on the payroll during the coronavirus (COVID-19) pandemic.
The loan is administered by the Small Business Administration (SBA) and can be used to cover payroll and certain other expenses.
The PPP loan is 100% federally guaranteed, which means that if you default on the loan, the SBA will pay back the lender.
How long does the PPP loan last?
The PPP loan has a maximum term of two years and an interest rate of 4%. The loan can be forgiven if you use it for eligible expenses and meet certain conditions.
How Many Weeks Does the First PPP Loan Cover?
The First PPP loan covers 2 or 8 weeks of payroll costs, depending on when you received your loan.
If you received your loan before June 5, 2020, your First PPP loan covers 2 weeks of payroll costs.
If you received your loan on or after June 5, 2020, your First PPP loan can cover 8 weeks of payroll costs.
What Happens if You Use the PPP Loan for Unapproved Purposes?
If you use the PPP loan for unapproved purposes, you may be subject to penalties. The SBA can impose a civil penalty of up to $5000 for each false statement or misrepresentation made in connection with a PPP loan. You may also be subject to criminal penalties, including imprisonment of up to 30 years, if you knowingly make a false statement or knowingly misuse PPP funds.
What Happens if You Do Not Spend the Full Amount of the PPP Loan?
You will not have to repay any unused funds if you have spent at least 60% of the loan on payroll expenses and the remaining 40% on eligible mortgage interest, rent, and utility payments over the 24-week period. If you do not spend the full amount of the loan on eligible expenses or if you do not spend at least 60% of the loan on payroll expenses, you may be required to repay a portion of the loan.
How to Apply for a PPP Loan
You can apply for a PPP loan through any participating SBA 7(a) lender or any FDIC-insured institution that is offering the loan.
You will need to complete and submit the PPP Application Form with your lender. The form includes questions about your business, such as size, ownership, and contact information. You will also need to provide information about your payroll costs for the past 12 months.
Once you have submitted your application, your lender will review it and make a decision on whether or not to approve you for a loan. If you are approved, you will receive the loan proceeds in the form of a lump sum payment.
Conclusion
In conclusion, the answer to how many weeks does the first PPP loan cover depends on the specifics of your business and loan agreement. However, most loans will cover 2-6 weeks of payroll expenses. Make sure to speak with your lender and review your loan agreement carefully to get the most accurate estimate for your business.
