The program provides 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 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 six months of deferral (interest will continue to accrue). Small businesses and other eligible entities will be able to apply if they were harmed by COVID-19 between February 15, 2020 and August 4, 2020. This program is retroactive to February 15, 2020, in order to help bring workers who may have already been laid off back onto payrolls. SBA loan approval is available through August 4, 2020.
What kinds of businesses are eligible for a PPP loan?
What are affiliation rules?
Affiliation rules are considered by the SBA for deciding whether a business’s affiliations preclude them from being classified as “small.” Affiliation typically exists when one business controls or has the power to control another, or when a third party (or parties) controls or has the power to control both businesses. Please see this resource for more information on these rules and how they might possibly affect your business’s eligibility.
How large can my loan be?
Loans can total up to 2 months of your average monthly payroll costs from the last year plus an added 25%, subject to a cap of $100,000 annualized for each employee and $10 million total. For a new or seasonal business, different applicable time periods will be used for that calculation.
What costs are eligible for payroll?
What can I use these loans for?
What are the loan term, interest rate, and fees?
The maximum term is 5 years for any amounts not forgiven, at a fixed interest rate of 1.0%, with zero loan fees or prepayment fee.
How much of my loan will be forgiven?
Payments from the loan used for payroll costs, mortgage interest, rent, and utilities payments over the 8 or 24 weeks after getting the loan (to be coordinated with your banker) will be forgiven. You will owe money when your loan is due for the portion of the loan amount that is used for anything other than the above – or if you do not maintain your staff and payroll.
How can I request loan forgiveness?
You can request loan forgiveness by submitting a request to the lender servicing the loan. The request will need to 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 is required to make a decision on the forgiveness within 60 days.
How does the PPP loan coordinate with SBA’s existing loans?
Borrowers may apply for PPP loans 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).
Can I apply for more than one PPP loan?
No, you can only get one PPP loan per legal business entity. However, if you have multiple legally distinct businesses, you can apply for multiple PPP loans. Each loan will be required to register under a unique Taxpayer Identification Number at SBA to prevent multiple loans to the same business.