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The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. Image: pxhere-Creative Commons CC0
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. Image: pxhere-Creative Commons CC0

The Paycheck Protection Program Resumes Accepting Applications

Jul 8, 2020

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Source: https://www.sba.gov/page/coronavirus-covid-19-small-business

Recovery Information in Languages other than English  >

 

Paycheck Protection Program

An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.

COVERED subjects 

Paycheck Protection Program Loan Information

Loan Details and Forgiveness

Who Can Apply

Lender Forms and Guidance

Additional Program Information

Other Assistance

Notice: Paycheck Protection Program has reopened

The Paycheck Protection Program resumed accepting applications in response to President signing the program's extension legislation. The new deadline to apply for a Paycheck Protection Program loan is August 8, 2020. 

Paycheck Protection Program Loan Information

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses. Click here to read more about PPP loan forgiveness.

How To Apply

You can apply through any existing SBA 7(a) 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 in the program.  View a list of lenders participating in the Paycheck Protection Program by state.

If you wish to begin preparing your application, you can download a PPP borrower application form (revised June 24, 2020)  to see the information that will be requested from you when you apply with a lender.

Supplemental Materials

Affiliation Rules

Loan Details and Forgiveness

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60% of the forgiven amount must have been used for payroll).

PPP loans have an interest rate of 1%.

Loans issued prior to June 5 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 years.

Loan payments will be deferred for six months.

No collateral or personal guarantees are required.

Neither the government nor lenders will charge small businesses any fees.

Loan Forgiveness

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:

    •    Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles

    •    Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the 24-week period after receiving their PPP loan

    •    Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness

    •    Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30

    •    Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined

Who Can Apply

The following entities affected by Coronavirus (COVID-19) may be eligible:

Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)

Sole proprietors, independent contractors, and self-employed persons

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

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

Lender Forms and Guidance

Paycheck Protection Program Interim Final Rule

SBA has issued the following Interim Final Rules related to the Paycheck Protection Program:

Additional Guidance for Lenders

Lender Notices

SBA Procedural Notice on Extension of Authority to Guarantee Paycheck Protection Program Loans.

SBA Procedural Notice on Participation Sales for Paycheck Protection Program Loans. The purpose of this Notice is to provide guidance to Lenders approved to participate in the Paycheck Protection Program regarding the sale of participating interests in PPP loans.

SBA Procedural Notice on Whole Loan Sales for Paycheck Protection Program Loans. This notice provides guidance on the procedures for completing whole loan sales of PPP loans between participating lenders. 

SBA Procedural Notice on Lender Processing Fee Payment and 1502 Reporting Process for the Paycheck Protection Program. The purpose of this Notice is to inform PPP Lenders of the reporting process through which PPP Lenders will report on PPP loans and collect the processing fee on fully disbursed loans which they are eligible to receive.

SBA Procedural Notice on Refinance of EIDL Loans with PPP Loan Proceeds and Lender Remittance of EIDL Refinance Proceeds to SBA

The notice informs PPP Lenders regarding how loan proceeds must be used to refinance SBA Economic Injury Disaster Loans (EIDL). The notice also informs PPP Lenders of the procedure for remitting to the SBA any PPP loan proceeds designated for the refinance of an EIDL.

Lender Forms

SBA and Treasury will consider applications for participation as PPP lenders from community development financial institutions and minority-, women-, veteran-, and military-owned lenders based on factors including those described on SBA Form 3507, including in cases where the lender does not meet all of the requirements listed on that form.  Among other criteria, SBA and Treasury will give strong consideration to the types of financial services provided by the lender; the lender’s compliance programs, including related to Bank Secrecy Act; and the number and dollar amount of small business loans originated and serviced by the lender in a 12-month period over the past 36 months.

Lender Submission Information

If you would like to submit loan authorization requests via our the online Paycheck Protection Lender Gateway, click here  and follow the steps below:

Create an account on SBA Connect.

Request authorization to the Paycheck Protection Lender Gateway by providing your FRS, FDIC, or NCUA number as well as your authorization number.

Proceed to the Paycheck Protection Program Lender Gateway to begin submitting loan authorization requests.

Lender Assistance

Lenders who need assistance accessing SBA's E-Tran system may call our Lender Customer Service Line at1-833-572-0502.

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Other Assistance

Enhanced Debt Relief  is also available in SBA’s other business loan programs to help small businesses overcome the challenges created by this health crisis.

For information on traditional SBA lending options, please click here.

SBA provides local assistance via 68 district offices and a nationwide network of resource partners. To find resources near you, please click here.

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