The Paycheck Protection Program: What You Need to Know

The Paycheck Protection Program: What You Need to Know to Determine If It Is the Right Fit for Your Business

April 15, 2020

Old Peak Finance - The Paycheck Protection Program: What You Need to Know to Determine If It Is the Right Fit for Your Business

The Paycheck Protection Program: What You Need to Know to Determine If It Is the Right Fit for Your Business

April 15, 2020

The COVID-19 crisis hit the market hard when stay-at-home and quarantine orders were introduced, shuttering many businesses essentially overnight. Even those who remained open had to scramble quickly to meet new market needs and follow new regulatory guidelines. Others had to layoff, furlough staff, or reduce employee wages or hours. 

The CARES Act was passed to mitigate that impact, including a provision called the Paycheck Protection Program. This program provides businesses with up to $10 million, with the primary goal of covering employee payroll, and the loan is 100% forgivable if you meet specific requirements.

Rick Waechter, CFP® and founder of Old Peak Finance, shares the details of those requirements here:

The Paycheck Protection Program (PPPLoan) has been in much demand, so we recommend business owners who qualify apply though their business banking relationship as soon as possible. Contact us if you have questions abut how this impacts your financial strategy as a business owner. We are here for you. 


The Paycheck Protection Program: What You Need To Know To Determine If It Is Right For Your Business

This is Rick Waechter, a Certified Financial Planner Professional and the founder of Old Peak Finance. Old Peak provides comprehensive financial planning for busy professionals and business owners. In this brief video I'll describe the key provision in the $2 trillion CARES Act for small business owners.

It's called the Paycheck Protection Program and it provides loans of up to $10 million for businesses that have been impacted by the current crisis and if the borrower meets certain requirements, the loan is entirely forgiven.

Those requirements are essentially twofold:

1. First, at least 75% of the loan must be used for payroll and
2. Second, headcount must be maintained at February 15 levels, with no one suffering a pay cut of more than 25%.

Another certification that a borrower must make -- let me read to you Treasury's language:

“Current economic uncertainty makes the loan necessary to support your ongoing operations."

The loans are generally available for companies with 500 employees or less, and that includes sole proprietors and gig economy workers.

Up to 25 percent of the loan amount can be used for non- payroll costs items, such as:

  • Rent
  • Mortgage interest
  • And Utilities

I mentioned before a $10-million cap on the loan amount. A borrower can access up to two and a half times monthly payroll, and in that calculation, you have to cap an individual's employee compensation at $100,000.

The loan program went live on April the 3rd and not surprisingly, there's tremendous demand. So while the application deadline is June 30 we'd suggest that you get your application in as soon as possible.

It's our understanding, that most major banks are accepting these applications, but only from existing banking relationships, so your first call should be to your existing business banker.

If you have questions, please reach out. You can find us at

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This article is not intended to provide tax, legal, accounting, financial, or professional advice. Readers should seek advice from qualified professionals who can review their specific circumstances. Old Peak Finance endeavors to provide information that is accurate and current. However, we cannot guarantee that this information has not been outdated or otherwise rendered incorrect by new research, legislation, or other changes. Old Peak Finance has no liability or responsibility to any individual or entity with respect to losses or damages caused or alleged to be caused, directly or indirectly, by the information contained on this website.

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