What is the Paycheck Protection Program?

The SBA Paycheck Protection Program is a program through the U.S. Small Business Administration passed into legislation on March 27, 2020 as part of the CARES Act to help businesses that have been impacted by COVID-19. We’ve identified some resources to help you understand the key details of the program from the U.S. Chamber of Commerce and the U.S. Senate Committee on Small Business & Entrepreneurship. 

Features

• Loan amounts up to 2.5x average covered monthly payroll and selected overhead expenses, not to exceed $10 million
• No fees
• No prepayment penalties
• No business collateral or personal guarantee required
• Loan forgiveness for eligible payroll, mortgage interest, rent and utilities during the covered eight-week period after origination
• Payments may be deferred for up to one year

Eligible business types

• Businesses and entities in operation on February 15, 2020
• Small Businesses, 501(c)(3) nonprofits, 501(c)(19) veterans organizations or tribal business concerns that have fewer than 500 employees or otherwise meet the SBA size standard
• Businesses in the accommodation and food service sector that employ 500 or fewer employees per physical location

What you should know

If you have already received an Economic Injury Disaster Loan (EIDL), you may still qualify for the Paycheck Protection Program as long as the EIDL was not used for the same purpose. 

Taking out an EIDL doesn’t mean you forgo a chance at PPP assistance. If you apply and qualify for an EIDL, and later qualify for a loan through the PPP, you will be able to refinance the EIDL with the PPP.

Who Can Apply

This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19.

Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.

Small businesses in the hospitality and food industry with more than one location could also be eligible at the store and location level if the store employs less than 500 workers. This means each store location could be eligible.

When can I apply?

• Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.

• Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.

• Other regulated lenders will be available to make these loans as soon as they are approved and enrolled in the program.

How to Apply

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union,  and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.

Lenders may begin processing loan applications as soon as April 3, 2020. 

Apply for the Paycheck Protection Program Find a Local Lender 

Use this tool link above to find a nearby lender eligible to issue a loan under the Paycheck Protection Program.

What's Included in Monthly Payroll Costs?

It includes salary, wages, commissions, payment of vacation, sick, parental/family/medical leave, payment of retirement contributions, group health coverage premiums and state and local taxes assessed on payroll. It doesn’t include federal payroll taxes though. It also doesn’t include payroll costs for those making more than $100,000. Their first $100,000 is considered, but anything in excess is not considered for determining average monthly payroll costs.  

What Can I Use This Money For?

First and foremost, payroll for you and your employees, but you can also use the money for rent, mortgage obligations, utilities and other debt obligations you may have.

Loan Details and Forgiveness

Other Assistance