Written by Ben Muir in the Watertown Daily Times on April 1, 2020

The federal coronavirus stimulus bill includes a much talked-about section in which small businesses can apply for loans that can forgive two months of payroll expenses.

One of the only provisions in the federal coronavirus bill that small businesses can take advantage of is the Paycheck Protection Program, which is designed to keep employees paid during the COVID-19 outbreak. The program expands the existing U.S. Small Business Administration loan program and is part of the over $350 billion that was allotted under the stimulus bill for small businesses. Those that qualify will be eligible for a loan of 250 percent of their average monthly payroll expenses, covering around eight weeks and not to exceed $10 million.

In a conference call with reporters Tuesday, Rep. Elise Stefanik, R-Schuylerville, said portions of a loan under the PPP will be forgiven for those who qualify, including payroll, rent or mortgage obligations and utilities.

“That’s a sliding scale in terms of the $375 billion,” Congresswoman Stefanik said. “We’re going to get a better sense in the next couple of weeks here how popular this program is and whether we need to ramp that up in an additional appropriations package.”

And small businesses can apply for these PPP loans at their local, SBA-approved financial institutions or credit unions, she said.

“I think that makes it very flexible for our banking institutions,” she said, “that already have a pre-existing relationship with these small businesses or nonprofits.”

Tim Lambrecht, a lawyer with Wladis Law Firm in East Syracuse, said he’s been advising his clients on the paycheck program since the bill passed.

“This is their best opportunity to potentially collect money,” Mr. Lambrecht said of small businesses. “I think it’s going to be helpful for some folks and provide some kind of relief.”

Businesses may use the loans on payroll costs, health care benefits, mortgage interest expenses, rent obligations, utility payments and interest on debt obligations incurred before Feb. 15, 2020.

Seasonal businesses are eligible, too, but they are treated differently, Mr. Lambrecht wrote in a blog post for his firm. Seasonal business expenses will be measured using a 12-week period beginning Feb. 15, 2019, or March 1, 2019, whichever the seasonal employer chooses.

Businesses are eligible for a loan under the PPP if they employ 500 employees or fewer and it includes tribal businesses, veteran organizations and nonprofits including religious organizations.

Mr. Lambrecht writes that if businesses maintain their payrolls, the amount eligible to be forgiven is equal to the sum of payroll expenses, existing interest payments on mortgages, rent payments, leases and utility service agreements.

There are some exclusions from payroll costs, which include anyone who makes more than $100,000 annually. Some other expenses like inventory might need to be paid for with the loan, however that portion will not be forgiven. For those uncovered expenses, business will have 10 years to pay it off at 4 percent interest.

“It really is something that knocked everything down,” he said of the COVID-19 outbreak. “We’re going to find out like everything that people are going to have to be patient while we find out how this actually works.”

You can read the full article at https://www.nny360.com/