One of the main tenants I remember from Finance 101 is, “there is no free lunch.” The approval of the Federal government’s Coronavirus Aid, Relief, and Economic Security (CARES) Act, which includes the Payroll Protection Program (PPP), has provided multiple avenues for small businesses affected by the spread of COVID-19 to “eat for free,” but it’s important that we remember that it’s on our own dime (this is owned by the future American Taxpayers).
A mentor of mine helped me understand that the scale of this program is more than double the inflation adjusted value of FDR’s New Deal; which should help us all realize that we need to engage with this aid responsibly.
With that said, I hope this brief article helps you understand the steps that you can take to provide your business with the aid required to maintain payroll and protect your people.
More detail on all things COVID-19 can be found at our curated landing page.
Who should I lean on to help my company with this program?
We recommend reading the content available from the first two sources and connecting with a qualified SBA lender for further guidance. The document provided by the U.S. Chamber of Commerce is very useful for understanding your business’ eligibility and the steps required to calculate your loan amount.
Gray Areas:
The notes below are not intended as legal advice and are anecdotal descriptions of our current understanding of the landscape:
- My firm has less than 500 employees, but we are a venture backed start-up, or formerly private company that changed ownership via private equity, does that change my eligibility?
- Eligibility will be specific to your ownership details, but in general, companies with this financial structure may be disqualified from the PPP.
- If I am a member of a Professional Employer Organization (PEO) ex. TriNet, TotalSource, Sequoia One, Insperity, etc., am I disqualified?
- Our understanding, based on our correspondence with multiple vendors, is that PEO clients are not disqualified from applying for relief through the PPP.
Additional regulations are anticipated in the very near future. We will include updates at our COVID-19 Resource Center as they occur.
