Paycheck Protection Program Details

Updated: Apr 2


While the SBA has yet to publish its written interpretation of the bill and guidance, here is what we currently know about the PPP


To be eligible, the business must have been operational on February 15, 2020, and had employees for whom it paid salaries and payroll taxes, or a paid independent contractor


Must have 500 employees or less, or the applicable size standard for the industry as provided by SBA if higher. Check HERE for size standards per NAICS code


Under current guidelines, affiliation is taken into consideration, and must aggregate all affiliate companies to fall under size standard to be eligible


Affiliation rules for businesses in the hospitality and restaurant industries are waived


Loan size is calculated at 2.5x last year’s average monthly payroll expenses, with maximum lending amount at $10 million. Below are examples of what counts as a payroll expense:


  • salary, wage, commission, or similar compensation

  • payment of cash tip or equivalent

  • payment for vacation, parental, family, medical, or sick leave

  • allowance for dismissal or separation

  • payment required for the provisions of group health care benefits, including insurance premiums

  • payment of any retirement benefit

  • payment of State or local tax assessed on the compensation of employees

  • the sum of payment of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self- employment, or similar compensation and that is in an amount that is not more than 100,000 in 1 year, as prorated for the covered period


Both borrower and lender fees are waived


The credit elsewhere test is waived


No personal guarantee is required


No collateral is required


Maximum interest rate is 4%


Gov’t guarantee will be 100% through end of 2020


Loan proceeds can be used for other business-related expenses, but stipulations apply to loan forgiveness. To be eligible for loan forgiveness:


  • Borrower shall be eligible for loan forgiveness equal to the amount spent by the borrower during an 8-week period after loan closing. (sum of expenses for payroll, and existing interest payments on mortgages, rent payments, leases, and utility service agreements)

  • If you would like to use the Paycheck Protection Program for other business-related expenses, like inventory, you can, but that portion of the loan will not be forgiven

  • Any loan amounts not forgiven at the end of one year is carried forward as an ongoing loan with terms up to 10 years, at max 4% interest. The 100% loan guarantee remains intact

  • Funds must be used to retain employees through June 2020. If employees are laid off, loan forgiveness may not occur for those specific employees


Subsidy on loan payments:

  • No borrower payments for 6 months

  • Potential for 12 month deferral on payments



Click HERE to download a copy of the PPP loan application.


Need more help? Contact us to day at 816.969.9234 or info@risebusconsultants.com



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