Obtaining the Paycheck Protection Program Loan
As of April 3, 2020, only a few SBA-approved lenders have begun accepting online applications for loans under the Paycheck Protection Program (PPP). Most banks are awaiting further guidance from the government, and we anticipate that more lenders will begin participating during the week of April 6th. The program is part of the federal government’s most recent coronavirus relief initiative and is intended to cover payroll and operating expenses between February 15, 2020, and June 30, 2020, for businesses with 500 or fewer employees.
Loans will be based on the borrower’s payroll costs, with per-employee salaries capped at $100,000. Loans will be forgiven for firms that use at least 75 % of the funding to protect 2019 employment and wage levels. Certain retroactive provisions are designed to encourage the reinstatement of reduced wages and rehiring of employees who have already been furloughed.First Steps
Apply as soon as your bank has its online application available. While applications will be accepted through June 30, 2020, overall funding is capped, and it’s anticipated that there will be great demand.
Collect the following information (more may be required):- 2019 IRS Quarterly 940, 941 or 944 payroll tax reports.
- Last 12 months of payroll reports beginning with your last payroll date. Reports should include:
- gross wages for each employee, including officer(s) if paid W-2 wages,
- family medical leave pay for each employee,
- state and local taxes assessed on payroll, for example, SUI,
- health insurance premiums paid by the company owner(s) under a group health plan,
- retirement plan funding that was paid by the company owner(s) (do not include funding that came from employees out of their paycheck deferrals),
- 1099s for 2019 for independent contractors who would otherwise be employees of your business.
When to Apply
Applications will be accepted by a few SBA lenders beginning on:
Calculating the Loan
The maximum loan is the LESSER of $10,000,000 or the following:
PLUS
- the outstanding balance of an Emergency Economic Injury Disaster Loan (EIDL) made between January 31, 2020, and the date of the PPP loan. Different dates apply for seasonal businesses.

What Lenders Will Be Looking For
Lenders will be seeking a “good faith certification” from applicants that:
Terms of the Loan
Loan applications will be accepted through June 30, 2020. There is a limit of one loan per business entity and the following terms apply to all applicants:
Borrowers must certify that they have not received loans that duplicate the purpose and amount of the PPP loan for which they are applying. However, there is an opportunity to fold emergency loans granted between January 31, 2020, and the start of PPP into a new loan.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. H V & Partners recommends that you consult professional tax, legal and accounting advisors before engaging in any tax, legal and accounting action or transaction.
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