The Paycheck Protection Program and Your Business

What is the Paycheck Protection Program?

The Paycheck Protection Program is a provision in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Specifically, it makes loans available for small business owners. The intent is that business owners will be able to support their employees throughout the pandemic. This is done by either retaining them, or rehiring those employees who were furloughed as a result of nationwide shutdowns.

The Paycheck Protection Program Extension Act was signed into law on March 30, 2021. This extended the deadline to apply for a PPP loan by two months, meaning that the new deadline to apply is May 31, 2021. Yoke Tax can help you apply fast, and work with banks to help you get the loan forgiven.



Some provisions of the Paycheck Protection Program have been revised since it was originally conceived in December 2020.

What kind of expenses does the Paycheck Protection Program cover?

The Paycheck Protection Program’s loans aim to cover varying business expenses during their covered period. Some of these expenses include payroll, insurance premiums, rent, utilities, and mortgage interest. The amount received varies based on the covered period. Under the CARES act, the original covered period was eight weeks. The PPP Flexibility Act lengthened the covered period to 24 weeks.

For payroll, the PPP covers employee salaries, commissions, hazard pay, bonus pay, and other similar forms of compensation. Each employee is able to receive a maximum cash compensation of $100,000. This pay is annualized for the covered period. For example, an employee with an eight week covered period would receive a maximum of $15,385 in cash compensation. Benefits which employers pay, such as insurance premiums and retirement contributions, are also covered by the PPP loan.

Non-payroll expenses which are covered by the PPP loan are more selective. Business owners may cover mortgage interest if it can be shown that the mortgage obligation was incurred before February 15, 2020. Payment for rent under a lease in force prior to that same date can be covered. Utilities payments can also be covered by the PPP loan if the services began before February 15, 2020.

What about Sole Proprietors, the Self Employed, and Partners?

Those who have self-employment income must file a Schedule C, as PPP loan amounts will reflect what was noted on their 2019 Form 1040 Schedule C. The loan will be limited to an eight week share of 2019 net profit (up to $15,385). Qualified sick leave is excluded if a credit has been claimed for it under section 7002 of the Families First Coronavirus Response Act (FFCRA)

What doesn’t the Paycheck Protection Program cover?

There are three primary exclusions for the PPP loan.

1. Individual employee compensation in excess of an annual salary of $100,000 during the covered period ($15,385 for 8 weeks, $46,154 for 24 weeks)
2. Compensation in any form for an employee whose principal place of residence is outside US borders
3. Wages for qualified family leave or sick leave under the FFCRA

Who qualifies for a PPP loan?

To receive the loan, a financial institution must confirm that the borrower was in operation as of Feb. 15, 2020, had employees, and determine the maximum amount of the loan.

Small businesses with 500 or fewer employees are eligible for the Paycheck Protection Program. This includes 501(c)(3) nonprofits, 501(c)(19) veterans organizations, tribal group business concerns (sec. 31(b)(2)(C) of the Small Business Act), self-employed individuals, sole proprietors, and independent contractors as well.

As of April 4, 2021, there have been 9,140,946 loans approved for a total net dollars of $745,822,791,609. Of those, 3,997,635 (43.7%!) were approved in 2021. Yoke Tax can help you get the money you deserve before loan funding runs out.

If you have more questions, the U.S. Small Business Administration (SBA) compiled a list of frequently asked questions which can be accessed here. The SBA also addresses some frequent concerns- such as PP loans only being sent to large corporations- in their myths vs facts section.

Why you should apply RIGHT NOW for a PPP Loan

Funds will run out soon. Partick Kelley of the SBA’s Office of Capital Access explained in a March 24, 2021 Senate hearing that he expected the Paycheck Protection Program to run out of funding by mid-April. By March 4, there was just $68 billion left (out of an original $291 billion). Even after its replenishments, the available funds are still drastically plummeting. As of April 4, $60 billion of round three PPP funding remains- just 21%.

In addition, there have been many cases of small businesses getting “stuck on hold” for the PPP loan. The increase of fraudulent checks and technological stress on the automated system which determines loans has been devastating to the honest Americans who need help. Although the SBA is working to implement machine learning in order to address these errors, as many as 100,000 borrowers remain without their loans.

The best way to avoid missing out on the Paycheck Protection Program (and try to avoid a confused automated system) is to apply right. Yoke Tax has professionals with over 20 years of experience ready to help you get the money you deserve. Simply sign up for a free consultation today.

Some More Good News

Did you know that you can apply for a second-draw loan? The SBA has recently ruled that small business owners can apply for a second-draw PPP loan, even if they haven’t waited eight weeks after receiving their first-round checks.

Previously, borrowers would have to wait the required eight weeks AND spend most, if not all, of the loan’s cash in order to access a second draw. Now, businesses with 300 or fewer employees need only to prove that they have experienced a 25 percent or more revenue cut due to the COVID-19 pandemic. There are, of course, a variety of stipulations when working with the government. However, working with a professional accountant can make a major difference in the amount you receive. Yoke Taxis equipped to complete all of your applications for the Paycheck Protection Program, and we can work with banks to help you get the loan forgiven. Let us handle the numbers.