LUBBOCK, Texas (KCBD) - On Friday, Small Business Administration lenders and banks began taking applications for the Paycheck Protection Program, which is designed to provide $349 billion in forgivable loans to small businesses, nonprofits or veterans organizations to pay their employees during the COVID-19 pandemic.
“There are a lot of employers out here that, without this even in this area, probably wouldn’t be able to make it,” Sen. Charles Perry, also a Certified Public Accountant, said.
Perry, who represents District 28 in the Texas State Senate, said banks have received the funds to disperse.
“Banks will have money available, subject to them completing their forms and their internal requirements,” Perry said. “You can take your payroll for 2019, divide it up, average it out multiplied by 2.5 and request that loan. If you get that loan on that premise, there’s an assumption you’re going to keep people employed this year or you’re going to rehire people that you’ve terminated. As long as you use 75 percent of money for those purposes, the other 25 percent can be used for rent, utilities and interest service. Then you get to have that loan forgiven at the end of that eight-week payroll period.”
The goal of the loan is to keep people employed and small businesses afloat during the crisis.
“If you had 60 employees coming out of ’19 and you’re now down to 40, because you had to cut 20 of them loose this year, and they went on to unemployment, the goal would be to go back and approach those people and rehire them with these funds,” Perry said.
The deadline to apply for the loan is June 30. That is also the deadline to have staff rehired. Perry said the personnel doesn’t have to be the same. He advises businesses to complete the application as soon as possible.
“People don’t understand the sacrifices [of] small business,” Perry said. “There are a lot of small business owners that are writing checks to the company to fund things they’ve got to do. If this [situation] gets back into sync around May, I think we’re going to be good and this money would be critical to rehiring those people that are out of work.”
For more answers to questions about the PPP, click here.