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The Paycheck Protection Program loan was designed to help employers continue to pay their employees during the COVID-19 crisis.  

  • Program available 4/3/20 through 6/30/20

  • Apply through your bank, not on the SBA website.

  • Meant for employers with fewer than 500 employees.

  • 1% interest rate, maturity was originally 2 years, now 5 years

  • Loan amount is 2.5X average monthly payroll (looking back 1 year, alternative period available to seasonal employer or not in existence for full year), up to $10M

  • Personal loan guarantee / collateral requirements are waived, but must certify the purpose of the loan and that you don't have another loan for the same purpose.

  • No requirement to prove you couldn't get credit elsewhere.

  • Payments are deferred for six months to a year

  • Can't be used:

    • to pay wages of any one person above $100,000

    • to pay wages for employees with principal residence outside of United States

    • to pay for paid leave already covered by the Families First Act

  • Eligible wages do include: normal salary/wage/commission, tips, PTO, family/sick/medical leave, severance, health insurance benefits, retirement plan contributions, employer portion of state & local payroll taxes, net income of sole prorpietors & independent contractors not to exceed $100,000


Reduction or cancellation of debt usually results in taxable income to the borrower. However, under the CARES Act, the forgiveness of PPP loan debt that was used for payroll costs, interest payments on mortgages, rent, utilities can be excluded from income.

  • Taxpayers must verify that the amount forgiven was used to retain employees, make interest payments, payment lease/rent payments, make utility payments.

  • This is for payroll, mortgage, rent, and utility payments made in the 24-week period beginning on the origination date of the loan (8 week period is allowed for any loans originated before 6/5/20).

  • This is for SBA Loans guaranteed under Sec 7(a)(36) of the Small Business Act made 2/15/20 - 6/30/20.

  • Rent must be paid under a lease agreement in force before 2/15/20.

  • Mortgage must be business-related and incurred beofre 2/15/20.

  • Utility (electricity, gas, water, transportation, telephone, internet) for which service began prior to 2/15/20.

  • At least 60% of the forgiven amount must be used for payroll

  • Employer must maintain pay rates and hours to qualify for forgiveness, though there are some safe harbor exceptions

  • Employer must maintain workforce size to qualify for forgiveness.  If a reduction in workforce is reversed by 12/31/20, you can still qualify for the forgiveness.

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