Update | With the anticipated passage of an interim bill by Congress and the President, new legislation is anticipated by Friday, April 24. We will update this article when the legislation is passed.

Resources | The SmallBusiness.com Guide to Coronavirus Pandemic

NOTE: The Payroll Protection Program ended on April 16, 2020. For more information, see: PPP Funds Exhausted: SBA No Longer Accepting Loan Application

While not all small business owners experienced smooth sailing when they tried to apply for a Payroll Protection Program loan beginning last Friday, the program is too important for small business owners to ignore. It’s worth noting, also, that the legislation that enacted the program was overwhelmingly passed overwhelmingly just one week before the application process began.

Late in the day on Friday, treasury secretary Steven Mnuchin tweeted that $1.8 billion in loan applications had been processed, mostly all from community banks. “Big banks are taking in large amounts but have not yet submitted their numbers,” he said. In the same tweet exchange, President Trump said he would request Congress to approve more money for the program.

The information below was prepared by the SBA as an overview of the program. (Note: SmallBusiness.com is not affiliated with the SBA.)


Contents you’ll find below

  • Loan Information
  • Who Can Apply
  • Loan Details and Forgiveness
  • Other Assistance
  • Lender Forms and Guidance

NOTE: The Payroll Protection Program ended on April 16, 2020. For more information, see: PPP Funds Exhausted: SBA No Longer Accepting Loan Applications

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 employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

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.

Lenders started processing loan applications on Friday, April 3, 2020. The Paycheck Protection Program will be available through June 30, 2020.


For affiliation rules applicable for the Paycheck Protection Program, click here. (PDF)


Who Can Apply?

The program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19.

Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.

Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.

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 75% of the forgiven amount must have been used for payroll).

The incentives included in the program

  • Loan payments will be deferred for six months.
  • No collateral or personal guarantees are required.
  • Neither the government nor lenders can charge small businesses any offer fees.
  • This loan has a maturity of 2 years and an interest rate of 1%.

Loan forgiveness requirements

  • Employer must maintain or quickly rehire employees at same salary levels.  
  • Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

Other Assistance

In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are currently eligible to apply for disaster 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 additional Lending options, please click here.

Another overview is available from the U.S. Treasury is available here (PDF).

SBA provides local assistance via 68 district offices and a nationwide network of resource partners.

To find more SBA resources near you, click here

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