Can I still get a PPP loan if I’ve closed my business or laid off employees?

In this 2-minute read:

  • Can I get a PPP loan if my business closed?
  • Can I get a PPP loan if I’ve laid off employees?
  • What if an employee quits or resigns? Can I still get my loan forgiven?

Due to the financial impacts of the coronavirus pandemic and customers adhering to stay-at-home orders, multiple American businesses have had to close their doors or lay off their employees—temporarily or permanently.

Many businesses in this position wonder if they still qualify for Paycheck Protection Program loans, which are intended to keep Americans employed and businesses open during this crisis. 

Womply has partnered with various trusted lenders to offer you the best possible rates on small business funding. Whether you need a term loan, a line of credit, or another type of small business capital, we can help! Click here to learn more.

If I’ve closed my business, can still I get a Paycheck Protection Program loan?

If you’ve had to close your business between February 15, 2020 and April 26, 2020, you may still qualify for PPP loans. For businesses that went out of business prior to that time period, you aren’t eligible for this program. 

In order to qualify for a PPP loan, you’ll need to restore your business and any changes that you’ve made, including employment levels and salaries, by June 30, 2020 (the deadline for restoring payroll and headcount levels has been extended to December 31, 2020. Read more here

Want to know how much you may qualify for? Check out our PPP loan calculator

How long do I have to rehire employees and restore payroll in order to apply for a PPP loan?

If you’ve had to lay off employees or reduce salary levels between February 15, 2020 and April 26, 2020, you can still qualify for PPP loans. 

In order to be eligible, you just need to hire back your employees (technically any employees, but of course the intent is to keep your former staff employed) and restore their salaries and hours worked to be the same that they were before this time period. You must have this done by June 30, 2020 (now December 31, 2020). 

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If you want to qualify for PPP loan forgiveness, it is imperative that you rehire your staff quickly and restore their salaries and hours in a timely manner as well. Check out our full article about PPP loan forgiveness

Go deeper: read about how to calculate your average monthly payroll and PPP loan request amount

NEW PPP FORGIVENESS UPDATE AS OF JUNE 17, 2020

The Treasury released a new IFR and an “easy” version of the PPP loan forgiveness application on June 17, 2020. Please read the full details here.

Here’s how borrowers decide which forgiveness application to use. You may use Form 3508EZ if:

  • You are self-employed and have no employees; OR
  • You did not reduce the salaries or wages of employees by more than 25%, and did not reduce the number or hours of employees; OR
  • You experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of employees by more than 25%.

If you don’t fit into any of the above conditions, you will need to complete and submit the full PPP loan forgiveness application.

Womply can help you get the small business funding that’s right for you

Womply has partnered with various trusted lenders to offer you the best possible rates on small business funding. Whether you need a term loan, a line of credit, or another type of small business capital, we can help!

Click here to check out our small business loans resources, or schedule a free, personalized demo of Womply’s small business apps to learn more!

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