Tomorrow, Washington will make nearly $350 billion available to the nation’s struggling small businesses which have been hamstrung by the novel coronavirus and mandated state closures. 

Passed as part of the $2 trillion coronavirus stimulus bill signed into law last week, the Paycheck Protection Program (PPP) is aimed at giving the nation’s 29 million small businesses a lifeline to retain workers and curb some expenses while we fight this disease. 

The PPP promises less red tape and regulatory hurdles for small businesses to navigate than with other traditional Small Business Administration programs. 

Of all of the taxpayer-funded proposals to ease the economic hardship of COVID-19, small business loans may be an efficient and effective tool for short-term and long-term good.

First, they target aid where aid is needed. 

Second, although some loans will be forgiven, some will be repaid with interest so that future taxpayers aren’t on the hook. 

Third, this is a proactive approach that incentives companies to retain staff rather than waiting until workers have been laid off or furloughed and providing them financial assistance.

Taken together, these loans can keep employers from shedding their employment rolls in the short-term and help them pay critical bills until shelter-in-place and social-distancing restrictions are lifted. That may make getting back to normal a little easier.

Women should take note. Female-owned companies comprise 39 percent of all U.S. firms and employ about 8 percent of the total private sector workforce. They are just as likely to face the tough decision on how to continue to pay workers with no sales and revenue. 

Here are 10 things for (female) small business owners to know about the PPP:

  1. Loans may be 100% forgiven when used for payroll costs, interest on mortgages, rent, and utilities.
  2. Forgiveness depends on keeping all your employees.
  3. Nonprofits qualify too.
  4. Self-employed individuals and independent contractors are eligible.
  5. Funds are available beginning tomorrow, April 3, 2020 for small businesses and sole proprietorships but April 10, 2020, for independent contractors and self-employed individuals.
  6. Funds are not unlimited.
  7. Small businesses mean firms with 500 or fewer employees.
  8. Loans will be made of up to $10 million to cover payroll and certain other expenses (or 2.5 times your total payroll expenses).
  9. A criminal charge could disqualify you.
  10. Loans are due in 2 years but can be repaid penalty-free before that.

Read more about the PPP here.

We will have to assess the effectiveness of this program in coming months and years, but at least small business will have an emergency lifeline to help them through the worst of this situation and give workers a little piece of mind that they will have a job to return to.