At the MSMS Tele-Town Hall for Physicians: Q&A with CPAs earlier this week, representatives from Maner Costerisan reported that small businesses in Michigan have applied for 113,487 loans for a total of $15,689,012,295 through the Small Business Administration’s Payroll Protection Program. This equates to only 2.5% of the loans and 3.1% of funds nationally. The average loan size is $114,000 and 12.96% of these are within health care and social assistance. Unlike the first round of PPP funding that was utilized in days, the current allotment still has more than $120 billion available.
Small businesses, including physician practices, with no more than 500 employees are eligible to apply. The PPP allows a small business to apply to an SBA-approved lender for a loan of up to 250 percent of the business’ average monthly payroll costs to cover eight weeks of payroll as well as help with other expenses like rent, mortgage payments and utilities. The maximum loan amount is $10 million. A loan can be forgiven based on maintaining employee and salary levels. For any portion of the loan that is not forgiven, the terms include a maximum term of 10 years and a maximum interest rate of four percent. This program is retroactive to February 15, 2020 and available through June 30, 2020.
Late on Wednesday night, Congress passed the Paycheck Protection Program Flexibility Act. To qualify for loan forgiveness, the legislation gives small businesses more time to use the PPP loans by extending the eight-week period in which they must use the money to 24 weeks and lowers the threshold requiring businesses spend 75 percent of their funds on payroll to 60 percent. The bill would also extend the amount of time small businesses have to pay back loans from two years to five, if it doesn’t qualify to have the loan forgiven.
Here is an archived recording of the MSMS Tele-Town Hall for Physicians: Q&A with CPAs>>
Learn more information on the Small Business Administration's Payroll Protection Program>>