Paycheck Protection Loan Program (PPP)
Program Objective
The Paycheck Protection Program established by the CARES Act is implemented by the Small Business Administration with support from the Department of the Treasury. The effective period began March 27, 2020 through August 8, 2020. The Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act) enacted on December 27, 2020, provided appropriations through May 31, 2021 or until funds are expended, for the PPP loan program. SBA reopened the Paycheck Protection Program (PPP) for First Draw Loans the week of January 11, 2021. First Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations. Additionally, The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan. Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations
Business Entities (partnerships, corporations, LLC), Sole Proprietors, independent Contractors, 501(c)(3) nonprofit organizations, 501(c)(6)Organization, 501(C) 19Veterans organizations, and Tribal businesses described in the Small Business Act, maybe eligible if they also meet program size standards and certain limitations.
Eligibility
Eligible Applicants
- Small Business Person
Additional information is available on SBA's website at www.sba.gov
Beneficiaries
- Small Business Person
Not for Profit Entities and Small businesses that meet the size and eligibility standards
www.treasury.gov
How to Apply
Award Procedure
SBA provides approval notification to participating lender who provides a commitment letter and loan to the applicant.
Decision Timeline
- Approval: From 1 to 15 days
Program details & compliance
Description
Eligible small entities, that together with their affiliates (if applicable), have 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors—can apply. Entities with more than 500 employees in certain industries that meet SBA’s alternative size standard or SBA’s size standards for those particular industries can also apply.
A borrower is generally eligible for a Second Draw PPP Loan if the borrower: Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses; has no more than 300 employees; and can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
Mission Categories
Primary: Small Business
Use of Funds
Allowed Uses
In 2020 Loan proceeds may only be used for payroll costs; payments of interest on any business mortgage obligation, rent and/or utilities; interest on any other business debt obligations that were incurred before February 15, 2020; and/or to refinance SBA Economic Injury Disaster Loan (EIDL) loans made from January 31, 2020 through April 3, 2020. Payroll costs, including costs for employee vacation, parental, family, medical, and sick leave. Other However, the CARES Act excludes qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (Public Law 116–127).
In 2021 First Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
Required Documentation
Initial PPP requests required SBA Form 2483 Paycheck Protection Borrower Application Form to be submitted to a participating PPP lender. All loans will have the same terms regardless of lender or borrower. A list of participating lenders as well as additional information and full terms can be found at www.sba.gov.
Existing PPP borrowers that did not receive loan forgiveness by December 27, 2020 may: (1) reapply for a First Draw PPP Loan if they previously returned some or all of their First Draw PPP Loan funds, or (2) under certain circumstances, request to modify their First Draw PPP Loan amount if they previously did not accept the full amount for which they are eligible.
Borrowers can apply for a First Draw PPP Loan until May 31, 2021, through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, eligible non-bank lender, or Farm Credit System institution that is participating in PPP. All new First Draw PPP Loans will have the same terms regardless of lender or borrower.
Borrowers can apply for a Second Draw PPP Loan until May 31, 2021, through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, eligible non-bank lender, or Farm Credit System institution that is participating in PPP. All Second Draw PPP Loans will have the same terms regardless of lender or borrower.