Paycheck Protection Program

This page will be updated continuously to reflect the most recent information. This page was last updated on May 20, 2021.

The American Rescue Plan provides $7.25 billion nationwide for additional first- and second-round Paycheck Protection Program (PPP) loans to small businesses and nonprofits. On May 4, 2021, it was announced that the program was out of funds and that the SBA would stop accepting new applications.  Details are below.

Expanded eligibility for nonprofits and internet-only publishers: 

  • PPP eligibility is extended to additional nonprofits listed in Section 501(c) of the Internal Revenue Code, provided that: 1) the organization does not receive more than 15 percent of receipts from lobbying activities; 2) the lobbying activities do not comprise more than 15 percent of activities; 3) the cost of lobbying activities of the organization did not exceed $1,000,000 during the most recent tax year that ended prior to February 15, 2020; and 4) the organization employs not more than 300 employees. 
  • Eligibility is also extended to internet-only news and periodical publishers, as long as the business has no more than 500 employees per physical location (or the applicable SBA size standard for that North American Industry Classification code). The organization must certify it is an internet-only news or periodical publisher and that the loan will support locally-focused or emergency information. 

Interaction with Shuttered Venue Operators grants: The American Rescue Plan allows eligible entities (e.g., theaters, museums, live entertainment venues) to access both PPP and the SBA’s Shuttered Venue Operators (SVO) grant program, which was previously prohibited. Entities are now eligible for SVO grants regardless of whether they received a second or first PPP loan after December 27, 2020. However, once an entity applies for an SVO grant, they can no longer apply for PPP. An entity’s SVO grant amount will also be reduced by the amount of PPP loans received on or after December 27, 2020. More information on the SVO program can be found here

Previously announced revisions to PPP: On February 22, 2021, the Biden administration announced the following revisions to expand access to PPP loans: 

  • The SBA will revise the PPP loan formula for sole proprietors, independent contractors, and self-employed individuals so they can receive more financial support; 
  • The SBA will expand eligibility to include: 
    • Small business owners with prior non-fraud felony convictions; 
    • Small business owners who have fallen behind on student loan payments; and 
    • Non-citizen small business owners who are lawful U.S. residents and have an Individual Taxpayer Identification Number (ITIN).

Where can I apply for a PPP loan?
Entities can immediately apply through any existing SBA 7(a) lender, any federally insured depository institution, federally insured credit union and farm credit institution participating in the program. The Department of Treasury will oversee authorization of new lenders, including non-bank lenders. To find a participating lender near you, please click here. Prospective borrowers are encouraged to contact their financial institutions to check if they are offering PPP loans.

What documents do I need to apply for a PPP loan?
Prospective borrowers will have to complete the Paycheck Protection Program loan application here and must also include their payroll documentation to be submitted to their lender. Borrowers are encouraged to apply as quickly as possible so lenders have time to process the loan.

What are the terms of PPP loans?
 For those loans approved by the SBA before June 5, 2020, the loan term is two years. For those loans approved by the SBA on or after June 5, 2020, the loan term is five years. For loan proceeds that are not forgiven, there will be a 1% fixed interest rate. All payments will be deferred for six months, but interest will accrue over that time period. No collateral or personal guarantee is required, and there will be no prepayment penalties or fees.

Who may be eligible for first-draw PPP loans?
If you are applying for a first-draw PPP loan, you may be eligible if:

  • Your small business or entity was in operation prior to February 15, 2020.
  • You are a self-employed individuals, sole proprietor or independent contractor;
  • You are a small businesses, or any business, 501(c)(3) nonprofit organization, 501(c)(19) veterans organization, or Tribal business concern that
    • Has fewer than 500 employees; or
    • Meets the SBA’s applicable size standard for number of employees for the North American Industry Classification System (NAICS) industry. A link to the size standards is found here.
  • Any business concern that employs no more than 500 employees per physical location of the business concern and that is assigned a NAICS code beginning with 72, for which the affiliation rules are waived.
  • Affiliation rules are also waived for any business concern operating as a franchise that is assigned a franchise identifier code by SBA, and company that receives funding through a Small Business Investment Company.
  • Other entities that also may now be eligible are:
    • 501(c)(6) nonprofit and destination marketing organizations are also eligible, provided they have 300 or fewer employee and are not lobbying organizations.
    • FCC broadcast station license holders and newspapers that have more than one physical location, provided they have 500 employees or less per physical location or the applicable SBA size standard. Nonprofit or tax-exempt public and private universities and colleges with a public broadcasting station are eligible, provided that the organization certifies the loan will go toward supporting locally focused or emergency information.
    • Housing cooperatives with 300 employees or fewer, provided they meet the definition in Section 216(b) of the Internal Revenue Code.

For more information on first-draw PPP loans, visit the SBA’s site here.

Who may be eligible for second-draw PPP loans?
If you are applying for a second-draw PPP loan, you may be eligible if:

  • You have 300 or fewer employees;
  • You can demonstrate at least a 25 percent drop in gross revenues between comparable quarters in 2019 and 2020; and
  • You previously utilized a first-draw loan and will or have used the full amount, only for authorized expenses.

For more information on second-draw PPP loans, visit the SBA’s site here.

What first-draw PPP loans will be forgiven?
First-draw PPP loans may qualify for full loan forgiveness if, during the 8- or 24-week covered period after loan disbursement:

  • Employee and compensation levels were maintained;
  • The loan was spent on qualified expenses; and
  • At least 60 percent of the loan was spent on payroll costs.

***If you are unable to spend 60 percent of the loan amount on payroll, you may still be eligible for some loan forgiveness. Contact your lender for more guidance.***

What second-draw PPP loans will be forgiven?
Second-draw PPP loans may qualify for full loan forgiveness if, during the 8- or 24-week covered period after loan disbursement:

  • Employee and compensation levels were maintained in the same way as required for a first-draw loan;
  • The loan was spent on qualified expenses; and
  • At least 60 percent of the loan was spent on payroll costs.

***If you are unable to spend 60 percent of the loan amount on payroll, you may still be eligible for some loan forgiveness. Contact your lender for more guidance.***

How do I request PPP loan forgiveness?
Borrowers should work with their lender to complete the loan forgiveness process. Through your lender you will provide documentation verifying the number of employees on payroll and their pay rates, including IRS payroll tax filing and State income, payroll and unemployment insurance filings. Requests must also include documentation verifying payments on covered mortgage obligations, lease obligations and utilities. The request must be certified by a representative of the borrower’s business or an organization that is authorized to certify that the documentation provided is true and the amount being forgiven was in accordance with the program’s requirements.

More information on the loan forgiveness process can be found here.

What costs can I cover with PPP loan proceeds?
You may use the loan proceeds for:

  • Compensation including salary, wages, commissions or payment of cash tips (these are capped at $100,000 on an annualized basis for each employee/owner);
  • Employee benefits including costs for vacation, parental, family, medical or sick leave, allowance for dismissal or separation, payments required for the provisions of group health care benefits including insurance premiums, payment of any retirement benefit;
  • Payment of State and local taxes assessed on compensation of employees;
  • Allowance for dismissal or separation;
  • Paid administrative leave; and
  • For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.

In order to maintain eligibility for full forgiveness, up to 40 percent of loan proceeds may also go towards:

  • Payments of interest on any mortgage (but not payment or prepayment of principal);
  • Rent;
  • Utilities;
  • Supplier costs for goods that are essential to the borrower’s operations;
  • Worker protection expenditures –e.g., operating and capital expenditures on PPE, physical barriers to maintain sanitation and social distancing standards, etc.;
  • Payment for a business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses;
  • Interest on any other debt obligations that were incurred before February 15, 2020; and
  • Costs related to property damage and vandalism tied to public disturbances during 2020, which were not covered by insurance or other compensation.

More information
For more information, please click here to visit the SBA’s PPP resource page or here for the U.S. Department of the Treasury’s resource page on PPP. For further information on all of the CARES Act changes for small businesses, please click here.