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.
Through the Paycheck Protection Program (PPP), small business owners and other eligible organizations can apply for first-draw loans of approximately 2.5x their average qualified monthly payroll expenses, up to $10 million. Borrowers can use these loans to cover eligible payroll costs , and other eligible non-payroll costs, including rent, mortgage interest, and utilities. PPP loans may be forgivable , in whole or in part, if borrowers meet certain requirements.
In order to maximize the potential for loan forgiveness, business owners should adhere to the following requirements, among others:
- Maintain the average number of full-time employees on the payroll for the loan forgiveness covered period following the disbursement of the loan.
- Maintain employee salaries and wages for the loan forgiveness covered period following the disbursement of the loan.
- Spend at least 60% of the loan on eligible payroll costs and no more than 40% on additional eligible non-payroll costs within the loan forgiveness covered period.
Reducing employee headcount or wages by more than 25% during the covered period after you received your PPP loan proceeds from your lender may reduce the amount of loan forgiveness.
For more information about loan forgiveness, please refer to the loan forgiveness application .