When Covid came calling in 2020, the United States federal government implemented the Paycheck Protection Program (PPP), a $953 Billion business loan program established through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
The Paycheck Protection Program aimed to help businesses, self-employed workers, sole proprietors, certain nonprofit organizations, and tribal businesses continue paying their workers. The U.S. Small Business Administration was the entity in charge of the program and coordinated with local banks across the country to issue the loans.
Under the program, qualifying businesses were able to apply for low-interest private loans to cover payroll and certain other costs. The PPP loan, approximately 2.5 times the applicant’s average monthly payroll costs, could also be used to cover rent/lease, mortgage interest, and utilities. Some companies were able to obtain a second draw, usually equal to the initial amount.
Under provisions of the CARES Act, businesses can have the loan partially or fully forgiven, provided the entity kept its employee count and wage levels stable.
To qualify for loan forgiveness, borrowers must have used the money for designated expenses, and they must also apply for forgiveness. Otherwise, the full principal amount and any accrued interest must be repaid.
Over 11 million businesses applied for PPP loans and as of Feb. 20, 2022, the totals for loan forgiveness, according to the Small Business Administration:
Forgiveness by loan count
Total PPP volume (2020-2021) 11,427,757
Applications for forgiveness 9,758,832
Payments 9,679,431
Forgiveness by dollar amount
Total PPP volume (2020-2021) $789,776,462,485
Applications for forgiveness $703,344,518,431
Payments $695,581,269,282
Scores of businesses in Front Royal and Warren County applied for and received loans to pay staff and stay afloat. Loan amounts ranged from several thousand dollars to near $3.3 M. The SBA reported that 16,046 PPP loans were given to businesses in Virginia with a total of 611,235 jobs saved. Officials say all loans of $2M or more will be automatically audited.
Loan information can be found at SBA Paycheck Protection Program Data Lookup – FederalPay
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