Paycheck Protection Program

Information Sheet

The Paycheck Protection Program ("PPP") authorizes up to $349 billion in forgivable loans to small business to pay their employees during the COVID-19 crisis. All loans terms will be the same for everyone.

The loan amounts will be forgiven as long as:

The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the eight week period after the loan is made.
Employee and compensation levels are maintained.

Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.

Loan payments are deferred for six months.

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

Who can apply?

All businesses - including nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors - with 500 or fewer employees can apply. Businesses in certain industries can have more than 500 employee if they meet SBA employee-based size standards for those industries.

For this program, the SBA's affiliation standards are waived for small businesses (1) in the hotel and food services industries; or (2) that are franchises in the SBA's Franchise Directory; or (3) that receive financial assistance from small business investment companies licensed by the SBA. Additional guidance may be released as appropriate.

What do I need to apply?

You will need to complete a Paycheck Protection Program loan application and submit the application with the required documentation.

You can download an application at the bottom of this page.

The program expires June 30, 2020.

What other documents will I need to include with my application?

You will need to provide payroll documentation for the small business Paycheck Protection Program:

A copy of your 2019 business tax return.
Your 12/31/2019 financial statements (this is particularly important if you haven't filed your 2019 business tax returns yet).
A payroll schedule listing the people you employed in 2019, broken down by employee (this is being requested so that we can adjust the average to account for any employees making over $100,000).

Do I need to first look for other funds before applying for this program?

No. The usual SBA requirement has been waived (the "Credit Elsewhere" requirement).

How long will this program last?

Although the program is open until June 30, 2020, we encourage you to apply as quickly as you can because there is a funding cap and we need time to process your loan request.

How many loans can I take out under this program?

Only one.

What can I use this loan for?

You should use the proceeds from this loan on your:

Payroll costs, including benefits;
Interest on mortgage obligations, incurred before February 15, 2020;
Rent, under lease agreements in force before February 15, 2020; and
Utilities, for which services began before February 15, 2020.

What counts as payroll costs?

Payroll costs include:

Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
State and local taxes assessed on compensation; and
For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.

How large can my loan be?

Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. That amount is subject to a $10 million cap. If you are a seasonal business, you will use different applicable time periods for your calculation. Payroll costs will be capped at $100,000 annualized for each employee.

How much of my loan will be forgiven?

You will owe money when your loan is due if you use the loan for anything other than payroll costs, mortgage interest, rent and utilities payments over the eight weeks after getting the loan. Due to a likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.

You will also owe money if you do not maintain your staff and payroll.

Number of Staff: Your loan forgiveness will also be reduced if you decrease your full-time headcount.
Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.

How can I request loan forgiveness?

You can submit a request to the lender that is servicing the loan. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. The lender must make a decision on the forgiveness within 60 days.

What is my interest rate?

1.00% fixed.

When do I need to start paying interest on my loan?

All payments are deferred for six months; however, interest will continue to accrue over this period.

When is my loan due?

In two years.

Can I pay my loan earlier than two years?

Yes. There are no prepayment penalties or fees.

Do I need to pledge collateral for this loan?

No. No collateral is required.

Do I need to personally guarantee this loan?

No. There is no personal guarantee requirement.

**However, if the proceeds are used for fraudulent purposes, the U.S. government will pursue criminal charges against you.**

What do I need to certify?

As part of your application, you need to certify in good faith that:

Current economic uncertainty makes it necessary to support your ongoing operations.
The funds will be used to retain workers and maintain payroll or to make mortgage, lease, lease and utility payments.
You have not and will not receive another loan under this program.
You will provide to the lender documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting this loan.
Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. Due to a likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
All of the information you provided in your application and in all supporting documents is true and accurate. Knowingly making a false statement to get the loan under this program is punishable by law.
You acknowledge that the lender will calculate the eligible loan amount using the tax documents you submitted. You affirm that the tax documents are identical to those you submitted to the IRS. And you also understand, acknowledge, and agree that the lender can share the tax information with the SBA's authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with the SBA Loan Program Requirements and all SBA reviews.