Paycheck Protection Program

Rules for Eligibility

1. A small business with fewer than 500 employees
2. A small business that otherwise meets the SBA’s size standard
3. A 501(c)(3) with fewer than 500 employees
4. An individual who operates as a sole proprietor
5. An individual who operates as an independent contractor
6. An individual who is self-employed who regularly carries on any trade or business
7. A Tribal business concern that meets the SBA size standard
8. A 501(c)(19) Veterans Organization that meets the SBA size standard

In evaluating eligibility, lenders are directed to consider whether the borrower was in operation before February 15, 2020 and had employees for whom they paid salaries and payroll taxes or paid independent contractors.

Lenders will also ask you for a good faith certification that:

1. The uncertainty of current economic conditions makes the loan request necessary to support ongoing operations
2. The borrower will use the loan proceeds to retain workers and maintain payroll or make mortgage, lease, and utility payments
3. Borrower does not have an application pending for a loan duplicative of the purpose and amounts applied for here
4. From Feb. 15, 2020 to Dec. 31, 2020, the borrower has not received a loan duplicative of the purpose and amounts applied for here (Note: There is an opportunity to fold emergency loans made between Jan. 31, 2020 and the date this loan program becomes available into a new loan)

If you are an independent contractor, sole proprietor, or self-employed individual, lenders will also be looking for certain documents

(final requirements will be announced by the government) such as payroll tax filings, Forms 1099-MISC, and income and expenses from the sole proprietorship.

• That the borrower sought and was unable to obtain credit elsewhere.
• A personal guarantee is not required for the loan.
• No collateral is required for the loan.

Click for instructions on how much can be borrowed.

Loan is forgiven if you meet these requirements

A borrower is eligible for loan forgiveness equal to the amount the borrower spent on the following items during the 8-week period beginning on the date of the origination of the loan:

• Payroll costs (using the same definition of payroll costs used to determine loan eligibility)
• Interest on the mortgage obligation incurred in the ordinary course of business
• Rent on a leasing agreement
• Payments on utilities (electricity, gas, water, transportation, telephone, or internet)
• For borrowers with tipped employees, additional wages paid to those employees
• The loan forgiveness cannot exceed the principal.

What if you bring back employees OR restore wages?

Reductions in employment or wages that occur during the period beginning on February 15, 2020, and ending 30 days after enactment of the CARES Act, (as compared to February 15, 2020) shall not reduce the amount of loan forgiveness IF by June 30, 2020 the you eliminate the reduction in employees or reduction in wages.