Question

The Federal Government is offering a Payroll Protection Program through the Small Business Administration. It's objective is to keep businesses fully employed as we all go through these trying times with COVID 19. Please research the program and give your thoughts on the objectives and potential success (or challenges) related to economic activity.

Answer 1

Introducing Payroll protection program was a great initiative by them as into this crisis the whole world is suffering from the no hand money situation. This is actually a potential challenge to the government as to upto when can they sustain this productivity. The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to
small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the
same for everyone.The loan amounts will be forgiven as long as:
1. The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and
utility costs over the 8 week period after the loan is made andemployee and compensation levels are maintained.
2.Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
Loan payments will be deferred for 6 months.

Hope the world recovers soon!