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PPP

Paycheck Protection Program


The Paycheck Protection Program prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses.

Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards. 

Program will be available retroactive from Feb 15, 2020, for employers to rehire their recently laid-off employees through June 30, 2020. 

Under this program:

  • Eligible recipients may qualify for a loan up to $10 million determined by 8 weeks of prior average payroll plus an additional 25% of that amount.
  • Loan payments will be deferred for six months.
  • If you maintain your workforce, SBA will forgive the portion of the loan proceeds that are used to cover the first 8 weeks of payroll and certain other expenses following loan origination.

UPDATES AS OF JUNE 15, 2020

  • Extend the covered period for loan forgiveness from eight weeks to 24 weeks after the date of loan disbursement.
  • Lower the requirements that 75 percent of a borrower’s loan proceeds must be used for payroll costs to 60 percent for each of these requirements.
  • Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity the business was operating at before February 15, 2020.
  • Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020.
  • Increase to five years the maturity of PPP loans that are approved by SBA.
  • Extend the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender
  • In addition, the new rules will confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved.

Frequently Asked Questions 

Expand or Collapse all.
    • 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.

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

  • Retroactive from February 15, 2020. 

  • 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 www.sba.gov for a list of SBA lenders.

    • They have met all standards for participation with SBA
    • They are given delegated authority to speedily process PPP loans
    • They have systems to process quickly
    • Same day approval
  • 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. 

    For this program, the SBA’s affiliation standards are waived for small businesses (1) in the hotel and food services industries (NAICS code 72 to confirm); or (2) that are franchises in the SBA’s Franchise Directory ; or (3) that receive financial assistance from small business investment companies licensed by the SBA. Additional guidance may be released as appropriate.

  • No. A business owned by non-citizens/non-LPR is eligible. The only requirement on citizenship is that only employees whose primary residence is in the United States are eligible for consideration in payroll.  The foregoing is with reference to the PPP program only.

  • 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.

  • You will need to provide your lender with payroll documentation such as:

    • First eight weeks of total payroll cost, as well as other expenses including rent, utilities and mortgage and interest (P&I)

    • Proof your business was fully operating on February 15, 2020

    • Verification you had employees, how many, and that you paid payroll and payroll taxes 

    • Verification of the average monthly payroll cost

     

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

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

  • Only one.

  • 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.

  • Payroll costs include:

    • Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);

    • Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;

    • State and local taxes assessed on compensation; and

    • For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.

  • 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.

  • You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.

    You will also owe money if you do not maintain your staff and payroll.

    • Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount.

    • Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.

    • Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.

    • You may apply for loan forgiveness if in the 8 weeks following the date of loan origination you maintain or quickly rehire and maintain employees’ salary levels.
    •  Forgiveness is adjusted based on the employee head count and any salary and wage decreases 
  • 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.

    •The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (at least 75% of the forgiven amount must have been used for payroll)

  • This loan has an interest rate of 1%.

     

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

  • In 2 years.

  • Yes. There are no prepayment penalties or fees.

  • No. No collateral is required.

  • No. There is no personal guarantee requirement. ***However, if the proceeds are used for fraudulent purposes, the U.S. government will pursue criminal charges against you.***

  • 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. Due to likely high subscription, it is anticipated that not 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.


Ready to apply for PPP Forgiveness?

The Paycheck Protection Program is an SBA loan administered through approved lenders, that helps businesses keep their workforce employed during the COVID-19 crisis. It provides businesses with the ability to bring their workforce back onto payroll with a forgivable loan.

If you received a PPP loan, you must complete the PPP Forgiveness Application and submit it to your lender. You may begin submitting your forgiveness application beginning July 1, 2020. The application itself is 11 pages. You will also need documentation such as payroll processing records and tax filing statements, non-payroll expenses (electricity, gas, water, transportation, telephone, internet access), PPP loan contract, EIDL contract, and any supporting documents you used when applying for the PPP loan. 

Here are some tips for success:

  • Don't wait, gather all your documents now
  • Create a separate bank account for you PPP loan
  • Document the number of Full Time Employees (FTE) with the hours they worked and pay they received during the 8 week period
  • Stay up to date with any new laws and regulations
  • Have patience
  • Reach out to SBDC for assistance

Intuit Aid Assist

A free service for everyone, helps U.S.-based businesses, self-employed, contractors, freelancers, and gig workers understand different business relief programs.

Click on button below and tell Intuit about your business, they will let you know your loan eligibility, and then find out where to apply.

SBDC Assistance

Still have small business questions related to SBA EIDL or CARES Act? Complete our online intake form and we will be in touch!


Funded in part through the State of Texas and a Cooperative Agreement with the U.S. Small Business Administration. The support given by the U.S. Small Business Administration through such funding does not constitute an expressed or implied endorsement of any of the cosponsors’ or participants’ opinions, findings, conclusions, recommendations, products or services. Reasonable accommodations for persons with disabilities or limited English proficiency will be made if requested at least two weeks in advance. Contact Texas State University SBDC by phone at 512.420.9379 or via email at sbdc@txstate.edu.