Editor’s note: 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 and how they apply to your particular situation.
Through the Paycheck Protection Program (PPP), small business owners and other eligible organizations can apply for loans of approximately 2.5x their average qualified monthly payroll expenses, up to $10 million. These loans are intended to keep employees on the payroll and small businesses and other eligible organizations afloat amid the coronavirus.
PPP loans are not intended to put small business owners in debt. These loans may be forgivable, in whole or in part, if borrowers meet certain requirements. Among others, business owners must use at least 60% of the forgivable amount on eligible payroll costs during the loan forgiveness covered period. Additionally, no more than 40% of the forgivable amount can be used on other eligible non-payroll costs, including rent, mortgage interest, and utilities.