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Paycheck Protection Program Under the CARES Act

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. One important aspect of the CARES act is the Paycheck Protection Program (the “PPP”), a program which authorizes up to $349 billion in forgivable loans to businesses across the country. This program will be accepting applications from businesses beginning on April 3, 2020.

Generally, the PPP will benefit smaller businesses with 500 or fewer employees. PPP loans to small businesses will be forgiven (and will not have to be repaid) under certain circumstances. As an initial matter, the loan money must be used only for certain allowable costs, including the following:

  • covering payroll costs and benefits;
  • mortgage interest on obligations incurred before February 15, 2020;
  • rent costs pursuant to leases entered into prior to February 15, 2020;
  • utilities that began service to the business prior to February 15, 2020.

Also, the amount of loan forgiveness will be reduced if a business cuts employees or reduces wages by more than 25%. The PPP includes more details about forgiveness and a formula for determining potential loan forgiveness amounts.

Businesses can apply to borrow up to 2.5 times the company’s average monthly payroll costs, up to a maximum of $10 million. Loan payments can be deferred for six months and the interest rate for the loans will not exceed 4%. The loans will not require security or personal guarantees and can be repaid over a period of up to ten years.

Information about the timeline and process for applying, the businesses that are eligible, and other information about PPP Loans can be found at the following link to the SBA’s website:

A PDF version of the application can be found on the SBA’s website at the following link:–paycheck-protection-program-ppp-sample-application-form

If you have questions or would like to discuss applying for a PPP loan, please contact Attorney Michael P. Doherty, Attorney Andrew M. Kepple, Attorney Gabriel W. Bell, or one of our other employment attorneys at 508-541-3000.

This blog is for informational purposes only. It should not be considered legal advice. All those who read this blog should seek the advice of a professional before taking action based upon any information provided herein.

© 2020 Doherty, Dugan, Cannon, Raymond & Weil, P.C.


Andrew Kepple

Article by Attorney Andrew Kepple

Attorney Andrew M. Kepple has more than 10 years of experience in state and federal courts, concentrating his practice in the areas of landlord-tenant law, civil litigation and employment law.

TEL: 508-541-3000