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At Dinote we’re doing our part to socially distance, and support the online business community by extending our Pro plan subscription to help aid in accessing non-dilutive capital. Additionally, you’ve probably heard about the US Coronavirus Aid, Relief, and Economic Security (CARES) Act and its $350 billion Paycheck Protection Program (PPP) loan package by now. We wanted to take a moment to share a quick overview of how the PPP might apply to startups. 

Will my startup qualify for a PPP loan?
If you’re a bootstrapped company or a seed stage startup that raised a SAFE/convertible seed round, you’ll probably qualify. If you’re VC-backed, the current rules are slightly ambiguous; if your investor has significant control over your company (e.g. they have over 50% ownership or possess certain covenants), you might not qualify. We should have more guidance on this within the next week.

How large of a loan can I receive?
You’ll be able to get roughly 2.5x of your last year’s average monthly payroll as a PPP loan, with certain caveats—for example, employees with salaries over $100k can only have up to $100k of their salary counted towards monthly payroll.

Is the loan forgivable?
The loan is fully forgivable if used within 8 weeks of origination on payroll, rent, utilities, or mortgage payments. Since the loan is based on your previous year’s payroll, if you’ve reduced salary or headcount, part of the loan might not be forgivable.

What happens if my loan isn’t forgiven?
Repayment on the part of the loan that isn’t forgiven can be deferred 6-12 months, and interest on repayment is capped at 4%.

Are there application fees or personal guarantees?
Applying is free, and founders aren’t required to give a personal guarantee on the loan.

What’s the timing on this?
Applications haven’t yet opened, but you’ll be able to apply the loan to costs up till June 30th, 2020.

We’ve collected a handful of guides and links that may help leaders across any type of business:



Disclosure:

This communication is on behalf of Birch Global Inc., d/b/a Dinote, Inc. (“Dinote”). This communication is not to be construed as legal, financial, accounting or tax advice and is for informational purposes only. Dinote does not assume any liability for reliance on the information provided herein.

This post may contain links to articles or other information that may be contained on third-party websites. The inclusion of any hyperlink is not and does not imply any endorsement, approval, investigation, or verification by Dinote, and Dinote does not endorse or accept responsibility for the content, or the use, of such third-party websites. Dinote assumes no liability for any inaccuracies, errors or omissions in or from any data or other information provided on such third-party websites.

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