The Treasury has found many ways to help individuals and businesses in Tucson during COVID-19 closures. One of these aids is the Paycheck Protection Loan. On the surface, it seems to be a great deal; however, it might not be suited for all types of businesses. Keep reading to learn more about the fine print of the paycheck protection loan.
The Paycheck Protection Loan and keeping employees employed
In order to qualify for the PPL, you mustn’t have laid off more than two employees or cut wages more than 25%. When you are in a business that is completely shut down, this makes life a lot more difficult. If you do end up receiving the loan, you could run into a situation where you can make wages for the two months, but business is slow to start up again once the regulations are lifted.
Depending on your industry, you might experience a slow season beyond the slow season. This could result in having to lay off employees anyway.
The demand is higher than the supply
There is no doubt that most Tucson businesses are struggling during this time. The paycheck protection loan only has a certain amount of funding allotted to it ($359 billion), which unfortunately won’t be enough to cover every business in need. The frenzy to apply might make people who wouldn’t really benefit from the loan rush to apply, just in case.
It really depends on your bank
The Paycheck Protection Loans come from SBA approved banks. If you are already banking with one of those banks, you have an advantage. You could end up at the bottom of the barrel just because of the bank you chose years ago.
Additionally, with the program being so new and the demand being so high, the SBA portal has been experiencing issues. From site crashes to error pages, banks are having a difficult time even accessing the portal to process loans.
The Paycheck Protection Loans results are unclear
With the program being brand new, things are changing constantly. The SBA has announced that over 1 million applications have been accepted, totaling in over $247 billion. They have not released what types of businesses have received the funding, or even why people have been denied. The fact that more funds have been requested is evidence for the money already running out quickly, and there is no certainty whether or not more funds will be added.