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The starter gun fired Friday, April 3, for businesses hurt by COVID-19 to apply for forgivable loans designed to help them keep employees on the payroll.

But the federal Paycheck Protection Program is first-come, first-serve until its $349 billion is depleted.

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“There’s tremendous interest from people applying for this,” Memphis attorney John A. Bobango of the Farris Bobango law firm said Friday. “And some are just now learning about it over the last couple of days. They see the opportunity it presents.”

The program is generally for any business with under 500 employees and which has been burdened by the sicknesses, closures and other social-distancing effects from the pandemic.

The Paycheck Protection Program basically pays for eight weeks worth of a business’s payroll costs, including benefits as well as salaries and wages. It also includes compensation for some other business-related expenses such as rent and utilities. The maximum a business could qualify for is $10 million.

But there are rules to follow, forms to fill out, deadlines to meet and a finite amount of money – $349 billion – to be shared by small businesses across the U.S.

Farris Bobango has emailed a chart to its clients and others breaking down what businesses must do for the forgivable loans.

The document summarizes the program, using 29 categories ranging from “Threshold Requirements” to “Eligible Businesses” to “Required Documents” to the application start and end dates.

“We have a list of clients we represent and that’s how we started it,” Bobango said of the chart. “But there’s so much confusion in our community for information, we started sending it to people we thought could benefit, be it real estate owners, people with a lot of tenants. … We send them to trade association groups. We send them out to some restaurant and hotel groups.”

Firm attorney Mary Lauren Stewart spearheaded the project to create the chart. She waded through the program’s text and other documents to explain it in simpler terms. 

The government kept tweaking or refining the rules for the past week or so, meaning that the law firm had to keep sending out updated versions of the chart.

For example, originally the act stated the interest rate on the forgivable loan would not exceed 4%, then dropped it to no more than a half-percent, and finally on Thursday set the rate at 1%.

The government issued its latest guidelines as late as 10:30 Thursday night, April 2, just before the April 3 start date, Stewart said.

“I was just trying to make it simple to explain how people can best calculate the numbers and what information they need, the best I could explain it at a basic level,” Stewart said. “I feel there’s a lack of information out there, or misinformation.”

The process can be simple enough for a business to apply for the forgivable loan without hiring financial or legal professionals, Stewart said, adding, “as long as they have the information to best optimize their average monthly payroll.”

Businesses can count not only the salaries or wages they pay, but employee benefits as well. And they also can receive some money for expenses like utilities and rent.

Applying for the loan will be simpler than the second, later step, which will be applying for forgiveness of the loan. A key will be keeping good records on how the business spent the loan money.

“We think you should open a separate bank account so you can trace how you move it,” Bobango said. “You can move the money over to your operating account to pay employees. It’s a way to make sure you outline the use of the funds.”

But those plans could be moot for businesses that wait too long to apply for the loan and risk doing so after the program has run out of money.

Many already have applied, and Bobango and Stewart suggested that the rest submit their loan applications as soon as possible.