SBA Paycheck Protection Program (PPP)

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Summary The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone.
Who should consider applying? Businesses with need for cash to cover payroll, mortgage interest, rent, and utilities as a result of COVID-19 crisis.
Highlights  – Funds spent on payroll, interest, rent, and utilities over and 8-week period will be forgiven
– Max Loan amount equal to 2.5x average monthly payroll
– 1.0% interest
– Loan payments deferred for 6 months
 Where do I apply? Starring April 3, 2020, apply through any existing SBA lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating.
What forms and information will I need to apply? 1. Paycheck Protection Program Application Form
2. Payroll cost documentation

Joint Statement by Secretary Steven T. Mnuchin and Administrator Jovita Carranza on the Review Procedure for Paycheck Protection Program Loans PPP Interim Final Rule Distributed April 2, 2020
PPP Supplemental Interim Final Rule distributed April 14, 2020
PPP Approval Activity through April 16, 2020
PPP Interim Final Rule Distributed, April 24, 2020
PPP Interim Final Rule Additional Criterion for Seasonal Employers
Guidance on Participation Sales for PPP Loans
PPP Interim Final Rule Regarding Disbursements
PPP Interim Final Rule Distributed April 30, 2020
Guidance on Implementation of CARES Act for PPP Loans
SBA Form 3508 PPP Forgiveness Application
PPP FAQs as of May 19, 2020
New IFR published on PPP Loan Forgiveness
PPP IFR SBA Loan Review Procedures and Related Borrower and Lender Responsibilities

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.

Where can I apply?

You can apply through any existing SBA 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. Visit for a list of SBA lenders.

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

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 employees if they meet applicable SBA employee-based size standards for those industries (click HERE for additional detail).

For this program, the SBA’s affiliation standards are waived for small businesses (1) in the hotel and food services industries (click HERE for NAICS code 72 to confirm); or (2) that are franchises in the SBA’s Franchise Directory (click HERE to check); 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 the Paycheck Protection Program loan application and submit the application with the required documentation to an approved lender that is available to process your application by June 30, 2020. Click HERE for the application.

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

You will need to provide your lender with payroll documentation.  

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

No. The SBA is waiving the usual requirement that you try to obtain some or all of the loan funds from other sources (i.e., The SBA is waiving the Credit Elsewhere requirement).  

How long will this program last?

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

How many loans can I take out under this program?

Only one. 

What can I use these loans for?

You should use the proceeds from these loans 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 service began before February 15, 2020.

What qualifies as payroll costs?

Payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees; and for an independent contractor or sole proprietor, wage, commissions, income, or net earnings from self-employment or similar compensation.

Is there anything that is expressly excluded from the definition of payroll costs?

– Any compensation of an employee whose principal place of residence is outside of the United States;
– The compensation of an individual employee in excess of an annual salary of $100,000, prorated as necessary;
– Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be withheld from employees; and
– Qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (Public Law 116–127).

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 or new 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?

The amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest.

To calculate the exact amount of loan forgiveness, download the PPP Forgiveness Application.

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?

1.0% fixed rate.

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

All payments are deferred for 6 months; however, interest will continue to accrue over this period.

When is my loan due?

In 2 years.

Can I pay my loan earlier than 2 years?

Yes. There are no prepayment penalties or fees.

Do I need to pledge any collateral for these loans?

No. No collateral is required.

Do I need to personally guarantee this loan?

No. There is no personal guarantee requirement.

What do I need to certify?

As part of your application, you need to certify in good faith that:
– Current economic uncertainty makes the loan necessary to support your ongoing operations.
– The funds will be used to retain workers and maintain payroll or to make mortgage, 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. No more than 25% of the forgiven amount may be for non-payroll costs.
– All the information you provided in your application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a 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 SBA Loan Program Requirements and all SBA reviews.

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