NOTE: At the moment, the application paperwork and guidance has NOT been published by the U.S. Treasury Department.
The program would provide cash-flow assistance through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would be forgiven, which would help workers remain employed, as well as help affected small businesses and our economy to snap-back quicker after the crisis. PPP has a host of attractive features, such as forgiveness of up to 8 weeks of payroll based on employee retention and salary levels, no SBA fees and at least six months of deferral with maximum deferrals of up to a year. Small businesses and other eligible entities will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020. This program is would be retroactive to February 15, 2020, in order to help bring workers who may have already been laid off back onto payrolls. Loans are available through June 30, 2020.
Q: What types of businesses and entities are eligible for a PPP loan?
A: The following are eligible.
Q: What types of non-profits are eligible?
A: In general, 501(c)(3) and 501(c)(19) non-profits with 500 employees or fewer as most non- profit SBA size standards are based on revenue, not employee number. You can check here.
Q: How is the loan size determined?
A: Depending on your business’s situation, the loan size will be calculated in different ways (see below). The maximum loan size is always $10 million.
Q: What costs are eligible for payroll?
A: The following are eligible.
Q: What costs are not eligible for payroll?
A: The following are NOT eligible.
Q: What are allowable uses of loan proceeds?
A: Uses of loan proceeds:
Q: What are the loan term, interest rate, and fees?
A: For any amounts not forgiven, the maximum term is 10 years, the maximum interest rate is 4 percent, zero loan fees, zero prepayment fee (SBA will establish application fees caps for lenders that charge).
Q: How is the forgiveness amount calculated?
A: Forgiveness on a covered loan is equal to the sum of the following payroll costs incurred during the covered 8 week period compared to the previous year or time period, proportionate to maintaining employees and wages (excluding compensation over $100,000):
Q: How do I get forgiveness on my PPP loan?
A: You must apply through your lender for forgiveness on your loan. In this application, you must include:
Q: What happens after the forgiveness period?
A: Any loan amounts not forgiven are carried forward as an ongoing loan with max terms of 10 years, at a maximum interest rate of 4%. Principal and interest will continue to be deferred, for a total of 6 months to a year after disbursement of the loan. The clock does not start again.
Q: Can I get more than one PPP loan?
A: No, an entity is limited to one PPP loan. Each loan will be registered under a Taxpayer Identification Number at SBA to prevent multiple loans to the same entity.
Q: Where should I go to get a PPP loan from?
A: All current SBA 7(a) lenders are eligible lenders for PPP. The Department of Treasury will also be in charge of authorizing new lenders, including non-bank lenders, to help meet the needs of small business owners.
Q: How does the PPP loan coordinate with SBA’s existing loans?
A: Borrowers may apply for and other SBA financial assistance, including Economic Injury Disaster Loans (EIDLs), 7(a) loans, 504 loans, and microloans, and also receive investment capital from Small Business Investment Corporations (SBICs). However, you cannot use your PPP loan for the same purpose as your other SBA loan(s). For example, if you use your PPP to cover payroll for the 8-week covered period, you cannot use a different SBA loan product for payroll for those same costs in that period, although you could use it for payroll not during that period or for different workers.
Q: How does the PPP loan work with the temporary Emergency Economic Injury Grants and the Small Business Debt Relief program?
A: Emergency Economic Injury Grant recipients and those who receive loan payment relief through the Small Business Debt Relief Program may apply for and take out a PPP loan as long as there is no duplication in the uses of funds. Refer to those sections for more information.
Please keep coming back to the website for updated information from us and feel free to read what you can to try and stay on top of an ever changing environment.