The government program that encourages small businesses to keep their workers during the COVID-19 pandemic has been replenished.
The Paycheck Protection Program, started as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, received an extra $310 billion after it was approved by U.S. Congress and the President.
The program encourages employee retention by tying loan forgiveness to staffing levels. The loans cover eligible costs including payroll for a certain period of time and are forgivable – they don’t have to be repaid – generally as long as staffing levels are retained.
Once a company starts letting go of employees, parts of the loan must be paid back under a formula tied to how many employees were let go. Effectively, the program provides funds to cover payroll, but laying off employees will mean watching free money walk out the door behind them.
Small companies can apply and find more details through the Small Business Administration.
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