Small Business Paycheck Protection Program

Under this program, small businesses that have fewer than 500 employees are eligible for loans to cover payroll and other expenses. Click here to apply.

Details: The amount of the loan cannot exceed the sum of 2.5 times the average monthly payroll cost during the year prior to the loan and the amount of economic injury disaster loans being refinanced under the program; it must be capped at $10 million and have a maximum interest rate of 4%. A formula will be used to determine the amount of the loan based on payroll costs incurred by the business (in order to determine the size of the loan). Allowable uses include payroll (employee salaries, paid sick or medical leave), insurance premiums, and mortgage/rent, and utility payments. Loans are available to eligible borrowers under the program through June 30, 2020, fees are waived, payments are deferred by at least 6 months, but not more than one year, and the SBA's “credit elsewhere” test (the ability to obtain funding from other sources without undue hardship) is waived. Loans under the program are fully guaranteed by the federal government, which is an increase to the existing guarantee percentages under the current SBA loan program. Collateral and personal guarantees are not required. To be eligible, a borrower must be in operation on February 15, 2020, and have paid employee salaries and payroll taxes. A business is not eligible to receive these loans if it receives an economic injury disaster loan for the same purpose. Loans under the program are eligible for forgiveness up to the aggregate amount of payroll payments, interest payments on mortgage obligations, rent payments and utility payments made during the eight-week period following loan origination as long as the amount does not exceed the original principal.The amount forgiven is lowered by reductions in full-time employment and in situations where total salaries and wages fall by more than 25% from the applicable prior period, but this can be mitigated by rehiring employees. Amounts not forgiven continue to be guaranteed and will have a maximum maturity date of 10 years from the date the borrower applied for loan forgiveness.


Call your bank today - Businesses may file applications with an SBA-approved lender. Lenders have been delegated authority to make loans without SBA review. Eligible applicants will have been in operation on February 15, 2020, and will have paid employees and payroll taxes or independent contractors. Applicants will need to certify that the loan is necessary, and will be used to retain workers and pay eligible expenses. Applicants will further need to certify that no other application for a loan for the same purpose is pending and that the entity has not received any other loan for the same purposes through December 31, 2020. Forgiveness of loans will be equal to the amount actually paid for payroll costs, salaries, benefits, rent, utilities and mortgage interest during the eight weeks following disbursement of the loan.The forgiveness amount is subject to reduction if there is a workforce reduction or a reduction in the salary or wages of an employee. The amount attributable to a salary or wage reduction will be the amount of any salary or wage decrease in excess of 25 percent of the total salary or wages during the most recent full quarter such employee was employed before the eight-week period. Only employees who did not receive, during any single pay period during 2019, wages or salary at an annualized rate of pay in excess of $100,000 are included in this calculation. Reductions in workforce, salaries and wages that occur from February 15, 2020 to April 26, 2020 will be disregarded for purposes of reducing the forgiveness amount so long as the reductions are eliminated by June 30, 2020. Borrowers must apply for forgiveness with the lender servicing the loan. Lenders have 60 days to review and make a determination. Any portion of the loan that is forgiven will be excluded from gross income.

Click here for more information.

Information on Economic Injury Disaster Loan (EIDL) Program can be found here.

Common Questions and Answers about the Payroll Protection Program loan that is in the federal CARES ACT.

Q: Does avg monthly payroll on PPP form derived from line 9 of form 1065 divided by 12. this line item includes bonuses and 401 k distributions?

A: The PPP does not reference any particular payroll documents.  You will have to go through your payroll expenses from 2019 and make sure you are only including allowable payments (paid by the applicant business): individual employee compensation up to $100K per year ($8,333 per month), paid leave, severance, retirement benefits, health benefits (including premiums), and state and local payroll taxes.  Everything else should be excluded from your calculation.

Q: On PPP form it says check more than one (payroll/rent) but does not ask anything about rent costs just payroll

A: The loan may be used for things in addition to payroll, including debt service and other reasons, so long as at least 75% of the loan money goes to payroll.  The calculation for the maximum loan amount, however, is based solely on payroll costs.

Q: When you say group health is that the portion the company pays outside of the payroll.    For example, if the employees contribute 50% that is on payroll but the companies 50% is not paid through payroll but through AP?

A: The calculation for your loan amount is based on payroll costs “paid by the applicant” – so you should exclude any amounts that are paid by the employee for any of the payroll cost items.

Q: Are employer matching 401k funds included in payroll costs?

A: Retirement benefits paid by the applicant/employer may be included.

Q: Read where .."the forgiveness is subject to decreases in employee head cout and decreases in employee compensation greater than 25% as compared to prior years." Does that mean one could cut back hour or have layoffs as long as not greater than 25% and still be forgiven??

A: As long as an individual’s wages are not cut by more than 25%, the loan forgiveness amount will not be reduced by that factor.  There is no percentage threshold on the number of full-time equivalent employees, however so layoffs that decrease your overall FTEE average (versus pre-crisis levels) will impact the forgiveness amount.

Q: Are companies with fewer than 50 employees exempt from the FFCRA requirements?

A: No, companies with fewer than 50 employers may be exempt from the requirement to provide paid time off for the reason that an employee’s child’s school or child-care is closed, but only from that one provision and only if they attest that providing that leave will jeopardize the business.

Q: I have multiple stores under different corporations. Do I have to apply for several different loans?

A: Not necessarily – if your “parent” company has its own business entity.  But remember, unless you have an exception (e.g., certain franchises, restaurants, hotels), you must include in your employee count the employees (full-time, part-time, and “other basis” employees) of the applicant and any of the applicant’s affiliates (based on common ownership, common management, or a few other bases).  Also, each loan is limited to $10M, so if you apply at the parent level, that’s the most you can get for all of your businesses.

Q: On Paycheck Protection Loan Program: Can invoices paid to outsourced labor firms be included in the average monthly payroll estimate that is calculated for the loan amount and can they be used towards the forgivable portion? (i.e. staffing agency bills or even outsourced accounting services)

A: This is a bit of a grey area.  Under SBA rules, you include “other basis” employees (e.g., those from temp agencies, PEOs, etc.) in your employee count, but it is unclear who gets to claim them from the “payroll cost” perspective.  Until we get further guidance from SBA, it may depend on what your bank will accept as verification of payroll costs paid by the applicant (for some banks, it may ultimately be whoever issues W-2s for these folks).

Q: Loan amount based on avg monthly Gross Payroll Expenses? Not Net, right?

A: Yes

Q: We have some employees that are no call, no show so that will affect our retention.  I guess we will need to provide proof of why we have not retained those particular employees for the paycheck protection loan?

A: The program does not distinguish between reasons that you may have lower employee counts so anyone you let go, even for cause not just because of economics, will count against the forgiveness percentage.

Q: If the owner of a business also has a more than 20% ownership interests in another company, are they precluded from applying for a PPL Loan?

A: No.  But you must list with your application any owners with 20% or more ownership and you must list all other businesses under common ownership or control with your business.  And remember the affiliation rules, unless you have an exception.

Q: Is it just FICA 6.2% EMPLOYER TAX or is it also Medicare 1.45% so that it's 7.65% employer taxes?

A: The only taxes paid by the employer that are included under the definition of “payroll costs” are state and local payroll taxes – NO federal taxes included.

Q: Is the loan for businesses that are closed due to the virus business or can essential business that are open with employee's working to help with payroll because business may be slow because of the virus?

A: The loans are available for any eligible business regardless of their current operating status as long as they were in business before February 15, 2020, and you can make a good-faith certification that you need the loan dollars to continue operations.

Q: What is the window of opportunity starts April 3rd until what date can applications be submitted?

A: The program expires on June 30, 2020, so that will be the last day to apply for loans (and this is subject to funds still being available for the program).

Q: If employees have been laid off or furlough prior to receiving a PPP loan are we still able to have the loan forgiven?

A: Loan forgiveness amounts are calculated by comparing the number of full-time equivalent employees you have during the first 8 weeks of the loan compared to either:

The number of full-time equivalent employees you had between February 15, 2019 and June 30, 2019; OR

The number of full-time equivalent employees you had between January 1, 2020 and February 29, 2020.

You choose which of those time periods to use.  Employees laid off before the initiation of the loan would not count in your totals for the first 8 weeks of the loan.

Q: State and Local payroll taxes should be within "Gross payroll" (wages, tips, other compensation, on the Annual Form 940 and quarterly 941.  So, I wonder why State and Local taxes payroll taxes is being listed, and not federal withholding taxes?

A: We don’t have any insight into this, unfortunately.

Q: On the application, the top column has different options to checkmark regarding which business you are. What category would C-Stores fall under? Our business doesn't seem to fall under any of the available options

A: You do not need to check any of those boxes if they don’t apply to you (those boxes reflect entities that are NOT normally eligible for SBA loans – for-profit business concerns who fit the “small” requirements have always been eligible).

Q: If an entity (separate LLC) applying for and gets a loan, and uses the loan to pay rent to a common ownership entity (though separate LLC) is that still legal?

A: You may pay your rent under the program – no restrictions under the law on who you make those payments to.

Q: PPL questions...What payroll dates do we use for calculation? Have heard 1/1/19-12/31/19 and heard  3/31/19 – 4/1/20

A: The law says that you should look at the 12 months of payroll costs before you submit your loan application.  The final application and rules from SBA, however, suggest that banks will look at your payroll documentation from calendar year 2019.  In order to avoid unnecessary delays with your application, we recommend checking with your banker about what exactly they want to see.

Q: If a convenience store company (NAICS #447110) qualifies for having under 500 employees, but does not qualify for the SBA revenue threshold, will this company qualify for the SBA Paycheck Protection Loan Program.

A: Convenience stores with fewer than 500 employees qualify for the small business loans, regardless of their revenue threshold.

Q: For payroll calculations currently I am using total earnings for 2019 and adding employer paid portion of benefits. What do we do with employer portion of FUTA, FICA, MEDI: add or not?

A: You should only include employer-paid portions of HEALTH and RETIREMENT benefits (not disability, life, etc.) and the only employer-paid taxes you should include are state and local payroll taxes (no federal taxes).

Q: Is it correct that you do not take the payroll tax credit if you plan on applying for the PPP loan?

A: Yes, if you receive a PPP loan, you are ineligible for the employee retention tax credit under the CARES Act.

Q: When we pay 66.7% of wages under FFCRA what happens if that drops someone below minimum wage?

A: The Department of Labor guidance on that is available at the following page: Note question #7

Q: What if you lent your company money for payroll cost after 3/1 can that loan be paid back?

A: The PPP loans will only let you pay interest on debt obligations, not principal.  And only interest payments on mortgage obligations will be forgiven.

Q: Can we add hazard pay to current pay rates and have that qualify?

A: Remember that your loan amount will be based on average payroll you already paid (looking back at either 2019 or the last 12 months before your loan application – depending on what documentation your bank wants).  So any changes to pay now will not be included in your loan amount.  Permissible compensation under “payroll costs” for how you may spend your loan includes: salary, wages, commissions, tips, other cash payments, or “similar compensation.”  So that seems to be pretty broad, but remember compensation is capped at $100K (annualized) for each individual employee.

Q: Where do we find what our NAICS code is?

A: You can find the industries NAICS codes here - most if not all convenience stores begin with the number 44

Q: For the purpose of forgiveness of the loan, will they consider payroll for full time employees only or part-time employees are also included?

A: All payroll for full or part time will be included

Q: What is the NAICS gross revenue threshold to qualify for the PPP loan for a convenience store operator?

A: Based on SBA guidance to date, it appears that they will disregard revenue thresholds for everyone and only consider employee size standards for PPP loans.  There are revenue thresholds which usually come into play for SBA loans.  That is $32 million per year.  However, that revenue threshold is not a factor in this program.  The requirement is for business with fewer than 500 employees.

Q: Is there a prepayment penalty on the loan?

A: No

Q: I am 7-Eleven Franchisee. On SBA directory 7-Eleven is not listed. Are 7-Eleven Franchisees qualified for all loans now available? If yes which program and from which Agency?

A: 7/11 is currently actively working to get added to the SBAs franchise list to allow franchisees to take advantage of the affiliation rule waiver so that individual franchise operators may satisfy the “under 500” employee count requirement.

Q: What period of time does the Employee Retention Credit cover?

A: The credit runs through the end of 2020.  However, it only applies to quarters where the business was either closed due to government order or experienced a greater than 50% decline in gross revenue as compared to the same quarter in 2019.  Once a business becomes eligible due to the revenue provision, they remain eligible until they have a quarter where revenue goes back above 80% vs. the same quarter in 2019 or December 31, 2020 whichever comes first.

Q: Employees do not currently have health insurance benefits.  Can I use loan to put that in place for their protection given the new environment?

A: You may, but remember that your loan amount will be calculated based on what you already paid your employees during the look-back period.

Q: Are these tax credits available to employers who are not required (over 500 employees) but voluntarily offer paid sick leave for employees affected by COVID-19?

A: The payroll tax credits meant to reimburse for paid time off are not available to businesses that are not required under FFCRA to provide paid time off.  The other tax credits under the CARES act are available however.

Q: To qualify for the PPL, is it either less than 500 employees OR the NAICS code or do you have to qualify under both?

A: Any business with fewer than 500 employees may apply for payroll protection program loan.  The NAICS code only comes into play if you are in an industry that normally has a “small” size based on employee count for SBA loans that is above 500 (then you can use that employee count threshold, instead of 500).

Q: Do supermarkets with multiple locations count employees PER location? And, therefore qualify?

A: No, the per location thresholds only apply to those with NAICS codes beginning with 72 which is hotels and restaurants.