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COVID-19 Resources
The Paycheck Protection Program
A quick-start guide for construction companies
Updated April 7, 2020
On March 27, President Trump signed the $2.2 trillion CARES Act (Coronavirus Aid, Relief, and Economic Security). $349 billion of that total package is set aside for loans to small businesses.
Since the CARES Act was passed, there’s been lots of piecemeal info regarding benefit eligibility flying around the web. The Buildr team has been digging into the fine print of the bill and various guides online as it relates to construction and decided to coalesce what’s most relevant for folks in construction into one conclusive resource.
The most valuable benefit for construction is the
Paycheck Protection Program
. Read on to learn more about it.
Who's
ELIGIBLE?
Companies with less than 500 employees.
General contractors, historically, wouldn’t consider themselves “small businesses” as their revenue is so high. The Small Business Administration has made it clear that the main qualification for PPP is a sub-500 employee headcount (part-time, contractor, or any other status included).
How much can be
BORROWED?
2.5
x
Monthly Payroll
The maximum loan you can take is 250% of your average total monthly payroll costs for the previous 12 months, or $10 million (whichever amount is less).
For further understanding of how to calculate your maximum loan, read the
U.S. Treasury's borrower fact sheet
.
How do you
APPLY?
Applications will be live on April 3rd, 2020 and end on June 30th, 2020. We recommend applying as soon as possible since the loans are available on a first come, first serve basis until the $349 billion is completely distributed.
The application can be found
here
.
Is this loan
FORGIVABLE?
Yes, if the loan is used for the following:
Payroll costs
Mortgage interest
Rent
Utilities
If the funds are used for anything else, or if employee count or wages are reduced, that amount is subject to repayment. A maximum amount of 25% of the loan can be used for anything not listed above.
Money that is owed is subject to a fixed interest rate of 1.00%, deferred for 6 months. No personal guarantee or collateral is required.
Check out the
U.S. Treasury's borrower fact sheet
for more information about what can be forgiven.