The CARES Act established the Amur Loan PPP (Paycheck Protection Program). This is a lending program. The Small Business Administration (SBA) is in charge of administering it. Moreover, the SBA offers government-guaranteed loans for qualified small companies.
What is Amur PPP Loan?
Amur distributes PPP loans in two rounds: first draw and second draw. Different companies can apply for different rounds. So, they have to match the criteria for the draw before applying. You will not be required to repay the loan provided you utilize the money as advised and meet the program's criteria. This is called “forgiveness” for loans. These qualifying firms can use Amur PPP Loans to:
- pay their payrolls;
- cover utility costs;
- handle employee benefits;
- cover retirement funds;
- pay for property damages, and much more.
Who Qualifies for First Draw Amur PPP Loans?
The first draw Amur PPP Loans are available to small companies, individual entrepreneurs, and independent contractors. Furthermore, a self-employed individual who meets the eligibility requirements can apply for an Amur PPP loan and be eligible for the first draw. However, you must meet the following requirements to apply:
- You have fewer than 500 workers.
- Moreover, you are a non-profit organization, such as a church.
- You're a 501(c)(3) charitable organization. A housing community, business league, or similar entity with less than 300 workers falls under this category.
- Lastly, you work for a qualified news organization or a tribe with less than 500 workers.
Who Qualifies for Second Draw Amur PPP Loans?
Small enterprises, single entrepreneurs, and independent contractors can also qualify for Amur PPP loans in the second draw. Furthermore, a self-employed individual who meets the criteria can qualify for such loans.
Even though these businesses have already received a first-draw PPP loan, they are eligible for a second. However, these businesses may be eligible for a “second draw” PPP loan provided they meet the following criteria:
- You have 300 or fewer workers.
- Moreover, your company's sales have dropped by at least 25% in any quarter compared to the preceding fiscal year.
- Before applying for the second draw, you have utilized or intend to spend the whole loan amount of your first draw Amur PPP loan.
- Finally, you have spent or plan to spend the whole amount of your loan on qualifying costs. These costs should fall under the appropriate PPP regulations. Similarly, these costs should be in line with the SBA's requirements.
How Does Amur Calculate Loan Amounts?
A firm can get a PPP loan for 2.5 times its average yearly monthly employee wages. This is true for the majority of enterprises. However, certain types of enterprises have a NAICS number that begins with 72. Restaurants, hotels, and event spaces are among them.
For Second Draw loans, these NAICS firms are eligible for higher PPP loan amounts. So, they can get amounts that are 3.5 times their yearly average monthly payroll expenses. For the determination of PPP loan size, Amur follows the SBA regulations and recommendations.
How Long Does It Take to Get PPP Loan Funds?
Obtaining an Amur PPP Loan is a quick and uncomplicated process:
- A borrower's loan is first assigned a Preferred Lender Program (PLP) number.
- The SBA must next approve the loan.
- Last but not least, the money is set aside for the borrower.
The SBA lender has ten clear calendar days for distributing funds. These days start when a borrower obtains their PLP number. The borrower has between eight and twenty-four weeks to consume the PPP loan amount. The borrower determines this time period.
When the borrower gets the money, the spending period begins on that date. Furthermore, they can only utilize the Amur PPP loan for approved purposes in order to be forgiven.
What Are the Necessary Documents for PPP Loan Applications?
According to SBA, you need to submit the following documents for a PPP loan:
- Payroll Documentation: This will include bank statements or approved payroll documents from a third party.
- Tax Forms: These documents will include taxation details and filings for the ongoing year.
- FTE Documentation: These documents should show the number of FTE employees in your company.
- Business Details: These documents will cover any obligations other than the payroll. So, you can include business mortgage documents, property paper, and rent contracts.
What Expenses Can You Cover with PPP Loans?
Payroll expenditures must account for at least 60% of the amount borrowed. You may use the remainder of your Amur PPP loan to pay for the items listed:
- payroll expenses;
- premiums for coverage;
- expenses associated with maintaining health-care coverage during sick days, emergency, or parental leave;
- interest costs on a mortgage;
- payments of rent;
- expenditures for utilities;
- any other financial obligations' interest costs;
- refinancing an EIDL loan from the Small Business Administration;
- property damage expenses;
- supplier expenses;
- expenses for worker protection at the workplace.
How Does Loan Forgiveness Work for PPP Loans?
You must utilize the whole amount of your PPP loan on qualified costs for loan forgiveness. Among these costs is a stipulation that 60% of PPP loan payments be kept aside only for payroll expenditures. You will be qualified for partial loan forgiveness if you utilize less than 60% of your loan money on payroll expenditures.
Once all borrowed funds have been utilized, a consumer can request forgiveness. Customers can request forgiveness at any point up to the loan's maturity period. PPP repayments are no more delayed if borrowers do not ask for forgiveness within ten months after the end of the authorized term. Therefore, the consumers will begin repaying their PPP financier after this period. You can use MINT to repay your loan to the lender.
What Is the Bottom Line Here?
Amur PPP Loans are here to help businesses during the ongoing pandemic. These times have been hard for everyone, and businesses need to get back on their feet. Therefore, SBA PPP loans can help stabilize businesses and offer the necessary funds. Businesses can use these funds to restart their payrolls, pay the utility bills, and take care of employee benefits.