Who qualifies for PPP? But first, what is PPP?
The Paycheck Protection Program aims to assist small businesses during the coronavirus pandemic and the social distancing used to combat it,.
The question of who qualifies was on the mind of many after it was revealed that many publicly traded companies had applied for--and received--PPP funds, which is a program that was kicked off in the $2 trillion CARES Act.
The program did get more money after quickly running out.
So, who is considered a small business?
Rebecca Rose Woodland, litigator and legal analyst, joined TheStreet's Katherine Ross to weigh in.
Watch the full video above for more.
Katherine Ross: PPP has really taken over the headlines specifically what companies have gotten PPP and returned it. So, joining me today to break down what exactly a small business is under this new legislation is Rebecca Rose Woodland, litigator and legal analyst, Rebecca, what is or is not a small business under PPP?
Rebecca Rose Woodland: So under PPP, which is a section of a stimulus package in the Cara's action, we've seen a second stimulus package passed and signed into law by the President. We've had a lot of, I'd say, gaming in the business. So with the second package, the Treasury Department issued some guidelines with the Small Business Administration as to what exactly is a small business that can apply for this PPP. And that's a business under 500 employees that operates independently. No hedge funds, no personal household. We're talking about people who can be independent contractors, people who employ less than 500 people per location. So if you have a car dealership, it could be dealerships by location, restaurants by location, So independent businesses. But Small Businesses Association is really looking to supply this money to small businesses that don't have the ability that aren't traded on the stock market or don't have a group effort in terms of their ability to get money elsewhere. So these are loans that will be forgiven if the employees are kept on. So the Small Business Administration and the Treasury Department are trying to keep businesses running once we come out of the isolation period.
Katherine Ross: In that definition, are you a small business if you have someone working for you?
Rebecca Rose Woodland: So, you could be yes, but there have been restrictions placed on that. So if you have employees and you are incorporated, There are for the most part that is considered a small business. What we have seen though, is the Treasury Department and the Small Business Association issuing very dire and specific warnings. If you're a hedge fund, you are not to apply. This is inapplicable to you. If you are a household, so, if you have incorporated your household and you have nannies and staff, I understand that there are many households that are trying to get this loan. It is not applicable to you. So it's applicable only if you employ people for a business purpose, not for your personal household, and your children and nannies and chefs, et. cetera, within a household.
Katherine Ross: All right, Rebecca. Thank you so much for joining us today. And for more on the Coronavirus pandemic and what it means for businesses, please head on over to the TheStreet.com.
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