A Quick Guide: Paycheck Protection Program

Any business with 500 or fewer employees
Includes sole proprietorships, independent contractors, self-employed individuals, non-profits, veterans organizations, tribal business concerns
Businesses in the hospitality and food industry with more than one location could be eligible at each store / location level if the store employs fewer than 500 workers
Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries

Starting April 3, 2020—small businesses and sole proprietorships
Starting April 10, 2020—independent contractors and self-employed individuals
By August 8, 2020 — applications must be submitted with required documentation to an approved lender
Existing lenders include — SBA lender list or participating federally insured depository institution/credit union, and Farm Credit System institution
Other regulated lenders — will be available as soon as they are approved and enrolled in the program

Payments / benefits to employees:
- Salary, wage, commission or similar compensation
- Cash tips
- Vacation, parental, family, medical or sick leave
- Dismissal or separation
- Group health care benefits, including insurance premiums
- Any retirement benefit
- State and local tax assessed on compensation of employees
Payments to sole proprietor or independent contractor:
- Any compensation or income that is a wage, commission, income, net earnings from self-employment that is not more than $100,000 per year (1099 payments could possibly be covered).
Payment of interest on mortgage obligation (not including prepayment) incurred before 2/15/2020
Rent / lease agreements in force before 2/15/2020
Utilities for which service began before 2/15/2020
Interest on any other debt obligations incurred prior to covered period

SBA will forgive loans if all employees are kept on the payroll for 8 weeks, and the money is used for payroll, rent, mortgage interest, or utilities
Loan forgiveness will be reduced if full-time employee headcount is reduced
Loan forgiveness will be reduced if salaries and wages are decreased by more than 25% for any employees who made less than $100,000 annualized in 2019
A business has until 12/31/2020 to restore full-time employment and salary levels

PPP provides nearly $350 billion in forgivable loans to small businesses to pay their employees for 8 weeks during the COVID-19 crisis
Existing SBA (Small Business Administration), other approved lenders make the loans
No fees, personal guarantees or collateral are required
No requirement that a small business cannot obtain credit elsewhere
Available 4/3/2020 through 8/8/2020 based on funding cap

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
Seasonal and new businesses will use a different applicable time period
Payroll costs are capped at $100,000 on annualized basis for each employee
Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs
Interest rate is 0.50% fixed rate, payments deferred for 6 months (interest accrues), loan due in 2 years