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Paycheck Protection Program (PPP1)

The Paycheck Protection Program (PPP) is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. Borrowers may be eligible for PPP loan forgiveness.

SBA is currently offering PPP loans until May 31, 2021. President Biden announced program changes to make access to PPP loans more equitable.

SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.

  • PPP loans have an interest rate of 1%.
  • Loans issued prior to June 5, 2020, have a maturity of two years. Loans issued after June 5, 2020, have a maturity of five years.
  • Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower’s loan forgiveness amount to the lender. If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (between 8 and 24 weeks).
  • No collateral or personal guarantees are required.
  • Neither the government nor lenders will charge small businesses any fees.

Who may qualify?
The following entities affected by COVID-19 may be eligible:

  • Sole proprietors, independent contractors, and self-employed persons
  • Any small business concern that meets SBA’s size standards (either the industry size standard or the alternative size standard)
  • Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
    • 500 employees, or
    • That meets the SBA industry size standard if more than 500
  • Any business with a NAICS code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location

HOW MUCH MONEY WILL BE AVAILABLE TO ME?

FIRST-DRAW PPP LOAN LIMITATIONS
The maximum amount a business that has not yet received a PPP loan can borrow is the lesser of:

  • 2.5 times the average monthly payroll costs and healthcare costs.
  • $10 million

SECOND-DRAW PPP LOAN LIMITATIONS:
Any company applying for a second-draw loan would be subject to stricter restrictions. The maximum second PPP loan amount is the lesser of:

  • 2.5 times the average monthly payroll costs and healthcare costs in the year prior to when the loan was received or within the calendar year.
  • $2 million

Note: Restaurants and other hospitality companies, such as hotels and casinos, have additional requirements.

How and when to apply?
Form 2483 – Paycheck Protection Program Borrower Application Form
Top-Line Overview of First Draw PPP Loans