Disclaimer: Regulations and guidance from the SBA and the U.S. Department of Treasury on the PPP are evolving rapidly. Please refer to the latest guidance from SBA and Treasury to confirm current program rules.
The Paycheck Protection Program is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which consists of $349 billion in government-backed loans to help small businesses continue paying payroll costs and certain operating expenses. Business owners can apply for up to $10 million of working capital to be used for , rent, mortgage interest, and utilities. Loans through the Paycheck Protection Program may be forgivable if certain criteria are met.
In general, small businesses with fewer than 500 employees are eligible to apply for PPP loans. Small businesses in hospitality and food service with more than one location may be eligible for loans for each location.
- Small businesses with fewer than 500 employees
- Sole proprietors, independent contractors, and self-employed individuals (including “gig workers”)
- 501(c)(3) nonprofit organizations
- 501(c)(19) veterans’ organizations
- Tribal business concerns (sec. 31(b)(2)(C) of the Small Business Act
- Independently owned and SBA-approved franchises
- Businesses with more than 500 employees that meet the SBA’s size standards
- Hospitality and food service businesses with fewer than 500 employees per location
- Business with more than 500 employees that do not meet the SBA’s size standards
- Businesses currently delinquent or have defaulted on an SBA or federal agency loan in the last 7 years
- Businesses presently involved in bankruptcy
- Borrowers presently suspended, debarred, declared ineligible, or voluntarily excluded by any federal department or agency
- Businesses engaged in illegal activities as defined by federal guidelines
- Business owners who are over 60 days delinquent on child support obligations
- Agricultural enterprises such as farms or ranches
- Gambling establishments
- Government entities or members of Congress
The SBA is allowing more small businesses to apply for the funding they need.
To be eligible for a PPP loan, borrowers must:
- Have been in business before February 15, 2020
- Meet the eligibility requirements
- Verify that current economic uncertainty makes the loan necessary to support ongoing operations
The SBA will not require any collateral or personal guarantees from potential borrowers. They’re also waiving the Credit Elsewhere requirement that says borrowers must try to obtain loan funds from other sources.
SBA affiliation standards are waived for:
- Small businesses in hospitality and food service
- Franchises in the SBA’s Franchise Directory
- Businesses that receive financial assistance from small business investment companies licensed by the SBA
As part of the application, business owners will need to certify in good faith that:
- PPP funds will be used to retain employees and maintain payroll
- PPP funds will be used to make mortgage, rent, and utility payments
- No more than 25% of the forgiven amount will be for non-payroll costs
- They will not receive another loan under this program
- They will provide all the necessary lender documentation
- Their tax documents are identical to those submitted to the IRS
If your business meets the above qualifications, you may be eligible to apply for a PPP loan. Apply for free through a participating lender.
The resources described above are made available to businesses within the United States of America.
Regulations and guidance from the SBA and the U.S. Department of Treasury on the PPP are evolving rapidly, and the information contained herein may be outdated. Please refer to the latest guidance from SBA and Treasury to confirm current program rules.
Given the large demand for additional authorized Paycheck Protection Program funds, not every qualified Paycheck Protection Program applicant will receive a loan.
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