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Great News! The Paycheck Protection Program, otherwise known as the PPP Loan is back.
The Paycheck Protection Program is providing small businesses with the resources they need to maintain their payroll, hire back employees who may have been laid off, and cover applicable overhead. This loan was offered in 2020 as a help to businesses who may have been affected by Covid-19. It is now back for a second round for those businesses that qualify to receive it.
Any small business with 500 or fewer employees may be eligible. This includes small businesses, S corporations, C corporations, LLCs, private nonprofits, faith-based organizations, tribal groups and veteran groups. Self-employed individuals who file an IRS Schedule C with their Form 1040, such as independent contractors and sole proprietors are also eligible. (Partners who report self-employment income, however, are not eligible as self-employed individuals. Restaurants and hospitality businesses may qualify if they have 500 or fewer employees per location. Details on the size standards and exceptions are on the SBA website.
An important factor to consider when applying for the PPP Loan is that your business must be in Good Standing. This means it is active with the state(s) in which you are registered, and you are up-to-date on all fees and remain in compliance.
To prove that the company is in good standing, clients may obtain a Certificate of Good Standing letter from the state in which it was incorporated. Some states will call this a Certificate of Existence. Because the cost and turnaround time of proof of Good Standing will vary from state to state, we encourage you not to wait to order this important document, if you plan on applying for the PPP Loan.
If you are incorporated in Delaware, obtaining a Certificate of Good Standing can often be done in as little as 2 hours, while other states may vary.
While a Certificate of Good Standing is often required, please research more about what your particular business may require. The Unites States Small Business Administration has a wealth of information regarding this loan. While some clients work with their accountant on this application, others will be able to fill it out successfully using the information provided on the United States Small Business Administration website.
Assistance with a PPP Loan application is not one of our services at Harvard Business Services, but we can assist you with getting a Certificate of Good Standing letter. A Delaware Certificate of Good Standing can be ordered here, and a Certificate for Delaware or any other state can be obtained over the phone by calling us at 1-800-345-2677. This phone number can also be used for questions about the Certificate of Good Standing.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such sourceâ€™s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.