Paycheck Protection Program

The Paycheck Protection Program (PPP) is an important part of the historic Coronavirus Aid, Relief and Economic Security (CARES) Act designed to help small businesses continue meeting payroll and other expenses during these trying times.

Here’s all you need to know about the Paycheck Protection Program.

What does the PPP offer small businesses?

The provision creates a new category of unsecured loans guaranteed by the Small Business Association (SBA). The loans do not require a personal guarantee and are available to many businesses that were previously not eligible for an SBA loan. The loans may be entirely or partially forgiven.

Which kinds of businesses are eligible for a loan?

Traditional SBA loans are only eligible for business entities designed to turn a profit. The company’s place of business must be located in the United States, and be primarily operated in the United States.

The Paycheck Protection Program has expanded to include all nonprofit organizations, veterans organizations and Tribal business concerns.

Does the business need to be a specific size to be eligible for the PPP?

To be eligible for a loan under the Paycheck Protection Program, a business must have no more than 500 employees, including full-time, part-time and temporary workers. This rule accounts for the business applying for a loan, as well as any affiliated businesses or entities, including for profit and nonprofit, as well as domestic and foreign businesses.

What is the maximum loan amount a business can apply for under the Paycheck Protection Program?

The maximum loan amount available under the PPP is generally the lesser of $10 million, or 2.5 times the average monthly payroll costs incurred during the one-year period before the date of the loan. Payroll costs include all salaries, wages, commissions and cash tips; parental, family, medical or sick leave; severance pay; payments required for the provisions of group health care benefits, including insurance premiums; payment of any retirement benefit; and payment of state or local tax assessed on the compensation of employees.

How may the loans be used?

The loans from the Paycheck Protection Program can be used from Feb. 15, 2020, to June 30, 2020 for any of the following expenses:

Payroll costs
Costs related to the continuation of group health care benefits during periods of paid sick, medical or family leave
Insurance premiums
Employee salaries, commissions or similar compensations
Payments of interest (but not principal) on any mortgage obligation
Rent
Utilities
Interest on any other debt obligations that were incurred before Feb. 15, 2020

Will all loans that are part of the Paycheck Protection Program be forgiven?

A PPP loan is eligible for forgiveness in an amount equal to the sum of the following costs incurred during the 8-week period beginning on the date of origination of the loan: payroll costs; any payment of interest on any mortgage obligation that was incurred before Feb. 15, 2020; any payment on any rent obligation under a lease agreement in effect before Feb. 15, 2020; and payment for electricity, gas, water, transportation, telephone or internet service, which began before Feb. 15, 2020.

The loan forgiveness amount will be prorated down if the average monthly number of full-time employees during this 8-week period is less than the average monthly number of full-time equivalent employees. The forgiveness amount will also be reduced if there is a 25% (or greater) reduction in salary for any employee during this 8-week period.

Can a small business take out a loan under the Paycheck Protection Program and still be eligible for other relief under the CARES Act?

Taking a loan under the PPP can make an employer ineligible for some other relief under the CARES Act. For example, the employer will not be eligible for payroll tax relief if they apply for a loan under the Paycheck Protection Program.

Freedom has made the Paycheck Protection Program available to its current Business Banking members. Business membership must have been established on or before February 15, 2020. Visit freedomfcu.org/business/emergency-relief-assistance/ for more details.

Your Turn: Are you a small business owner who has applied for a loan under the Paycheck Protection Program? Tell us about it on Facebook, LinkedIn,Twitter, or Instagram.

Should I Take My Money Out of My Credit Union?

Q: With all the economic uncertainty now, I’m wondering if it’s safe to keep my money in my Freedom FCU accounts. Should I be withdrawing my funds to keep them safe?

COVID-19 has pummeled the economy in an unprecedented way, and financial experts say the economic fallout of the pandemic is just beginning. But that doesn’t mean you need to start hoarding your money under your mattress.

The economic picture in the country is grim. Anyone following the stock market knows it’s been on a wild ride since the novel coronavirus reached American shores. In just over a month, the market dropped 10,000 points and was subject to its worst day since 1987. And that’s just the stock market. Small businesses are gasping for relief as they struggle to turn a profit and meet payroll in a nearly comatose economy.

Laid-off and furloughed workers are stressing over paying their bills and covering their most basic needs as they wonder when, and if, they’ll be back to work. The health care system is overtaxed and underfunded as it races to combat the pandemic and keep up with the overwhelming demand for medical equipment and supplies.

With all that, though, you don’t need to worry about the money you have at Freedom FCU. The country may be battling a raging pandemic and the economy might be barely limping along, but neither of these factors affect the security of your funds at Freedom FCU.

As always, Freedom FCU is federally insured up to $250,000 by the National Credit Union Administration. This means your money is protected here no matter what’s happening on Wall Street or to the global economy. There’s no need to withdraw the money you keep in your Freedom FCU accounts.

The economy might be unstable right now and the immediate future of the country still unknown, but there’s one thing you can count on: Your money is secure at Freedom FCU.

County Teachers Win Golden Apple Awards

Golden Apple Awards Reception Held June 22

Freedom Federal Credit Union President and CEO, Mike MacPherson, with 2018 Golden Apple Annual Education Awards recipients — **Freedom Federal Credit Union President and CEO, Mike MacPherson, with 2018 Golden Apple Annual Education Award recipients. (L to R): Jacob Bennett, Kathleen Ford, and Tara Recor**

Freedom hosted a reception at the Credit Union’s Park Avenue branch to celebrate this year’s Golden Apple Awards winners. Kathleen Ford, a music teacher at the John Archer School won this year’s grand prize. Ms. Ford received the $2,000 prize for her plan to better connect students with disabilities through music and song. One of Ms. Ford’s goals is to purchase a complete set of Music K-8 magazines and CDs. Her entry also calls for adapted instruments, assistive devices and software. These items will better enable students with severe physical challenges to produce music independently.

Although we received a record number of submissions this year, Ms. Ford’s thoughtfulness and creativity in considering how the award could affect positive change for her students, school, and community made her application standout.

Additionally, two runners-up were selected: Jacob Bennett, Kindergarten Teacher at Havre de Grace Elementary, and Tara Recor, Gifted &Talented Resource Teacher at Prospect Mill and Halls Cross Roads Elementary schools. Both Mr. Bennett and Ms. Recor will receive $500 each to fund initiatives at their respective schools.

The Golden Apple Educator Award benefits Freedom members who work for HCPS and have a creative vision for education that can only be met with community support. Contest applicants must submit an essay demonstrating how their idea would serve their students, class, school and the Harford County community. A panel of Freedom employees, board members, and community leaders judges each year’s entries.