Paycheck Protection Program – Application Details

Title:
Paycheck Protection Program – Application Details
Publication:
Riker Danzig Corporate/Tax Client UPDATE April 2, 2020
Attorneys:
Practices:

The Small Business Administration (the “SBA”) has released a sample application form for the Paycheck Protection Program (the “PPP”) created last week under the CARES Act.  This application is available here.

An applicant should complete and submit the application form to its SBA participating lender, who will then make a determination regarding the applicant’s eligibility for financial assistance under the PPP.  In order to complete the form, an applicant will need, among other things, the following information:

The applicant and each person owning 20% or more of the applicant’s equity must certify in good faith to statements regarding economic uncertainty, use of funds, loan forgiveness and the accuracy of submitted information.

There are several important differences between the program requirements spelled out in the CARES Act and the requirements indicated on the application form and instructions:

The instructions on the application may be viewed as administrative guidance in interpreting the CARES Act, as the Small Business Administration has authority under the Act to issue such guidance.

Businesses that find the 75% payroll costs requirement difficult to meet may wish to consider taking out an economic injury disaster loan (“EIDL”) instead of a PPP loan.  While an EIDL is not subject to forgiveness (other than a $10,000 emergency grant), the repayment term is substantially longer – up to 30 years.  More information about this program is available in our prior alert.

Alternatively, New Jersey-based businesses with 25 or fewer employees and under $5 million in annual revenues may be eligible for support from the New Jersey Economic Development Authority (“NJ EDA”).  Businesses may explore their eligibility for such support by clicking here

If you have any questions about the PPP application or program requirements, or about the EIDL program or NJ EDA’s offerings, please contact Jason Navarino, Rich Lomuscio, or any member of Riker Danzig’s Corporate and Tax Departments.