> it's very important that this be as widely known as possible, so that someone doesn't let their business fail because they weren't aware of how this program works.
Agreed. So let's clarify a few things.
For the loan to be forgiven, you first need to be able to get it. From NYTs SBA loans page[1]:
> You must apply through a bank or other lender, so start by contacting one you already have a relationship with. Many banks are imposing restrictions and choosing to work only with their existing business customers.
> The Treasury Department said the program would start taking applications on April 3, a week after the bill was signed into law. But the department didn’t give lenders necessary technical information until just hours before the program was scheduled to start — and lenders are still waiting for some key guidance and documents, bankers said. Many are still developing their application rules and systems.
Most businesses that need the loans have been closed for 2-3 weeks now and it will most likely take at least another 2-3 weeks for them to see any money from those loans in their bank accounts[0,1], if they are lucky enough to qualify. Very few can wait that long before having to close for good.
Then, if you are able to get a loan, there are very important limitations to forgiveness (from the link in your comment):
> Your forgiveness amount equals your total payroll costs multiplied by the average number of FTE employees you retained for the eight weeks following the date of your loan origination
> You must spend at least 75% of your loan on payroll.
From another, more recent, article[1]:
> The agency said that “not more than 25 percent” of the forgiven amount may be used for nonpayroll costs, like rent.
So you only get up to 8 weeks of payroll, from the moment you get the loan (it won't cover anything you already paid), and then at least 75% must be used for payroll. So for example a restaurant, is very unlikely to be able to meet those requirements, because they are barely employing anyone right now, and their biggest expense is their lease, which they won't be able to cover with 25% of the PPP loan that should be used for their payroll. The restaurant would then need another loan to pay the lease, but that's a super risky loan, both for them and for the bank - the bank will probably not approve them and if they did, it would be under very bad terms for the restaurant. Banks are not in the business of losing money.
0: https://money.com/sba-loans-stimulus-ppp-application-require...
1: https://www.nytimes.com/article/small-business-loans-stimulu...