You Might Be Eligible for the Paycheck Protection Program, but Be Sure to Read the Fine Print
The news updates about the COVID-19 pandemic focus more and more on reopening, but right now most small business owners in the Washington DC area are waiting anxiously to see what happens next. Deciding when to reopen is a difficult task, indeed, unless you have superhuman ability to predict the future. Almost any course of action you take is bound to be costly. Reopening too soon could mean liability lawsuits if employees or customers get exposed to the novel coronavirus at your place of business. What happens if you reopen as soon as the government gives you the go-ahead, but then a second wave of COVID-19 cases requires DC businesses to close again a short time later, meaning that most of the money you invested in reopening goes to waste? Meanwhile, the longer you stay closed, the worse your financial situation gets. Is taking the risk and reopening really worse than watching your company sink deeper and deeper into the red. Small business owners do have options in these desperate times, but choosing the right one is easier with the expertise of a Washington DC small business lawyer.
Should You Get Your Hopes Up About a Paycheck Protection Program Loan?
Now that the prospect of small businesses reopening in DC is a question of “when” instead of “if,” the Paycheck Protection Program is sounding better than ever. The first round of funds ran out at lightning speed, so fast that, even if you applied, you have probably been waiting so long to see any of the loan money that your mind is racing in search of plan B. The federal government has announced plans to replenish the program funds, and some of the big companies that received loans through the program have returned the money so that the small businesses for which the program was intended can receive it.
If you plan to apply for a Paycheck Protection Program loan, there are other obstacles to receiving the money than just the astronomical demand. Although the goal is to make funds available to as many small businesses as possible, your company must meet the following requirements to be eligible to receive funds:
- If you are a franchisee, you must register your franchise business with the Small Business Association’s official directory before applying for a Paycheck Protection Program. If Brendan Bloggins owns a KFC franchise, the SBA needs to see that it is Brendan, not KFC, who bears the financial burden of paying the employees at that location.
- Most businesses in the cannabis and gambling industries are not eligible for the loans.
- You cannot use PPP funds to pay independent contractors, only employees.
- Applicants with a felony conviction from the past five years are not eligible to receive funds.
- If you have previously taken an SBA loan that resulted in financial losses for the government, you are ineligible.
- Your PPP loan application will not be approved if you are currently involved in bankruptcy proceedings.
Let Us Help You Today
A small business lawyer can help you decide to hang your hopes on an SBA loan or survive the COVID-19 pandemic with some other source of funds. Contact the Washington DC small business law attorneys at Tobin O’Connor Concino P.C. for help today.