PPP funds are intended to provide financial support to businesses affected by the COVID-19 pandemic. These funds can be used for a variety of expenses, including payroll, rent, utilities, and mortgage interest. Additionally, PPP funds can be used to purchase personal protective equipment (PPE). The specific expenses that PPP funds can be used for are outlined in the PPP loan forgiveness application. It’s recommended to check with your lender or the Small Business Administration (SBA) for the most up-to-date information on eligible expenses.
Eligible Payroll Costs
- Salaries and wages
- Commissions
- Bonuses
- Severance pay
- Employee benefits (including healthcare, retirement, and paid time off)
- State and local taxes
- Contributions to employee retirement accounts
- Employer’s share of health insurance premiums
In addition to payroll costs, eligible expenses also include:
- Interest on mortgage or rent payments
- Utilities
- Rent payments
- Property damage costs
| Expense | Maximum Amount |
|---|---|
| Payroll costs | 2.5 times average monthly payroll costs |
| Non-payroll costs | 25% of total loan amount |
How to Use PPP Funds
The Paycheck Protection Program (PPP) is a loan program that provides small businesses with funds to help them keep their employees on the payroll during the COVID-19 pandemic. The PPP was created by the CARES Act, which was passed by Congress in March 2020. The PPP has been extended several times, and the current deadline to apply for a PPP loan is March 31, 2021.
PPP loans can be used for a variety of expenses, including:
- Payroll costs
- Rent or mortgage payments
- Utilities
- Interest on debt obligations
- Software and cloud computing services
- Employee benefits (including health insurance and retirement contributions)
The following table provides more detail on how PPP funds can be used for utilities:
| Expense | Eligible |
|---|---|
| Electricity | Yes |
| Gas | Yes |
| Water | Yes |
| Sewer | Yes |
| Trash removal | Yes |
| Internet | Yes |
| Telephone | Yes |
PPP funds cannot be used for the following expenses:
- Profits
- Owner compensation
- Dividends
- Stock buybacks
- Lobbying expenses
- Taxes
Rent
Rent is one of the eligible expenses that can be covered by PPP funds. This includes rent for commercial or residential properties, as well as rent for vehicles or equipment. However, there are some restrictions on how PPP funds can be used for rent. For example, PPP funds cannot be used to pay for rent that is already overdue, and they cannot be used to pay for rent that is more than 12 months in advance.
- Rent for commercial or residential properties
- Rent for vehicles or equipment
If you are planning to use PPP funds to pay for rent, you should carefully review the eligibility requirements to make sure that you are using the funds for an eligible expense. You should also keep in mind that PPP funds are limited, so it is important to apply for the funds as soon as possible.
That’s a wrap! Thanks for hangin’ out and gettin’ the lowdown on how you can put those PPP funds to good use. Remember, these funds are meant to keep your biz afloat during these choppy waters, so don’t be shy about using ’em wisely. Keep an eye out on our site for more updates and tips on navigatin’ the post-pandemic biz world. Until next time, keep your head up and your books in check!