FAQs on PPP loans

Community Manager
Community Manager
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On March 27, the CARES Act was signed into law which includes a new program called the Paycheck Protection Program (PPP) to provide small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Below are some of the frequently asked questions that we have received about the new PPP program. If you have individual questions about eligibility, you should talk to your local lender for assistance. 

Who is eligible to participate in the new Paycheck Protection Program?

Small businesses with less than 500 employees, sole proprietors, independent contractors, and self-employed persons are eligible to apply for the PPP programs. 

When is the deadline to apply?

Applications began April 3 for small businesses and sole proprietorships and will begin April 10 for self-employed individuals and independent contractors. 

The program is open until June 30, 2020, however, the government is advising borrowers to apply as soon as possible given the loan cap on the program. 

Where can I find a lender to apply for the Paycheck Protection Program?

You can apply through any existing SBA lender, federally insured credit union, or Farm Credit System institution that is participating. Other lenders are being approved and enrolled in the program, so check with your financial institution to see if they are participating.

What documentation do I need to apply for a Paycheck Protection Program Loan?

If you wish to begin preparing your application, you can download a copy of the PPP borrower application form to see the information that will be requested from you when you apply with a lender.

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. 

How big are the PPP loans and what are the terms?

The maximum loan amount under the Paycheck Protection Act is $10 million, with an interest rate of 1%. No personal guarantee or collateral is required for the loan. The lenders are expected to defer fees, principal and interest for no less than six months and no more than one year.

I’m self-employed. How do I calculate my payroll to participate in the Paycheck Protection Program?

The CARES Act legislation states that you can claim your “wage, commission, income, net earnings from self-employment or similar compensation,” up to $100,000 per year. You should discuss with your lender what documentation they will require and what types of earnings will qualify.

Can I include payments to independent contractors in calculations of my payroll costs for the loan?

No. Any amounts that an eligible borrower has paid to an independent contractor or sole proprietor should be excluded from your business’s payroll costs. However, independent contractors or sole proprietors are eligible for a loan under the PPP, if they satisfy the applicable requirements.

I need some individual help. Where can I find business counseling?

You can find a network of small business counselors through the Small Business Development Centers. If you have a relationship with your local bank or financial institution you may want to reach out to them to discuss options.


Be sure to check out our Pro Resources to see all of the resources that are available for you during this time.