SACRAMENTO, Calif. — Small business owners struggling to stay afloat have help on the way in the latest $900 billion stimulus package.
Lawmakers set aside more than $284 billion in forgivable Payment Protection Program (PPP) loans for small businesses.
Melissa Sherwood was forced to close the doors to her Stockton salon three weeks ago for the third time since the beginning of the coronavirus pandemic and still doesn't know when she'll be able to reopen, given the stay at home order extension.
"Our livelihoods are being damaged, our families are being hurt, everything we've worked for is being taken away from us when we have no fault in this," Sherwood, owner of Tocco Divino Salon said.
As a salon that primarily does chair rentals, they weren't eligible for the first round of PPP loans and only got one small loan from the city of Stockton that's already long gone.
Sherwood believes she is finally eligible this time around but says she's already feeling overwhelmed by the paperwork.
"I actually stopped reading it because I was like, I don't know this is scary because you don't want to do it with excitement only to find out you didn't follow the rules and now you have all this money that you have to pay back and yet, we can't work," she said.
James Beckwith, president and CEO of Five Star Bank based out of Roseville, said his team was able to help secure more than 1,100 loans the first time and recommends that everyone get connected with their bank now to start the process.
"Be prepared because when it comes out, it's going to be fast and furious," Beckwith said.
While he believes applications won't be accepted until about mid-January, he says you'll have until March 31 to apply. You must have fewer than 300 employees and you can't be a publicly-traded company. And you must also prove a 25% decline in quarterly revenue compared to the same quarter last year.
"It's really taking this quarter in 2020, you pick it, calendar quarter versus the same calendar quarter of 2019. So it's not as difficult as you might think," he said.
To get loan forgiveness, Beckwith said business owners just have to pay attention to how they're spending the money.
"What that means is that you have to spend at least 60% of that PPP loan on payroll costs and 40% on other costs," he said.
The loans will be capped at $2 million, instead of $10 million like they were in the spring.
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