FED UPDATE: Paycheck Protection Program (5-1-2020)

New Stimulus Checks update for the self employed. A new way to get access to the SBA Paycheck Protection Program. A way to get approved for the forgivable loan

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Today I wanted to discuss some frequently asked questions about the SBA'S PPP, the paycheck protection program with a "new" way to access this forgivable loan. I wanted to speak with someone who runs and approves the applications for this process to get an insider's perspective regarding what it takes to get approved.

The PPP was meant for the little guy, the self employed, and the small business owner. Recently, the banks have been in involved in legal trouble due to favoring their wealthier corporate clients. As a result, much of the "stimulus check" money in this program has been slow to distribute to people that actually need it. In fact, large corporations were able to get a hold of the SBA PPP loan without actually needing it, and some corporations were forced to send the money back.

As a result, smaller, private equity lenders have been able to process the applications far quicker. I wanted to contribute a way to get this loan approved by asking Andrew Cartwright some commonly asked questions about this program.

Q: Who's eligible for this program?

A: Anyone who's self employed or a small business owner. That means Uber driver, Lyft driver, postmates, Airbnb hosts, videographers, photographers, and many more who participate in the gig economy that make a side hustle income can potentially be qualified for a forgivable loan.

Q: How much money can someone get from this?

A: The math is simple. Regardless of how much money you make, you may only use a maximum yearly limit of $100,000. Therefore, whatever number you use, you divide by 12, and multiply by 2.5. So if you use $100,000 / 12 = 8,333. Multiply that result by 2.5 and the final amount is $20,833 which is how much I was able to get approved.

Q: Do you have to pay it back?

AIt can be forgivable. It's structured as a 1% loan that needs to be paid back within 6 months, but can be deferred for another six months if you choose. However, the loan must be paid back within two years. It must also be used exclusively for "payroll" meaning, you have to pay your employees or yourself no more than 75% of that money, and 25% which can go toward rent, mortgate, utilities, etc. For more specific details

Q: - How does one go about getting their loan forgiven?

A: You are responsible for keeping track of the money using a separate bank account and bank statements. If you can prove that this money was used in the specified time frame, and is within the guidelines of the SBA, the loan will be forgiven.

Q: Can I use this money to pay down loans or THEORETICALLY invest it into a higher yielding investment like dividend stocks?

A: It's not advised but the government hasn't yet defined clear cut rules as to how the 1% loan can be used. In theory, it is possible, but unclear and not something that's advisable.

Q: What will you do with your loan Andrei?

A: I will be giving it back to the system so that other people can take advantage of it. I just wanted to make sure it was legit. I don't want to recommend something I wouldn't otherwise use or do myself.

Please use this money and this opportunity responsibly. It's a small contribution to helping people get approved for their loans to keep small businesses and self employed individuals afloat while we get through these tough times.

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