Under The CARES Act signed into law on March 27, small businesses in the U.S. have access to $350 billion in loans under the Paycheck Protection Program (PPP), a new federal loan program designed to help companies and their employees sustain the economic challenges of COVID-19.

The federal government says it has approved 220,000-plus loans valued at more than $66 billion since the program launched on April 3. And on April 9, the Federal Reserve Board announced plans to give more credit to banks so they can offer loans to more businesses as part of a broader, $2.3 trillion economic support plan. (Another proposed infusion of cash failed in the Senate on April 9; the issue will likely resurface soon.)

While lawmakers determine how much government money to funnel into the loans, some banks report they don’t have the government information needed to complete loans, and many business owners who’ve applied say they’ve yet to receive details about if and when they’ll receive money. 

Below, we’ll give you an overview of the Paycheck Protection Program. We’ll explain the current status of the program, the eligibility requirements for your business and other important information and resources you’ll need to apply.

What is the Paycheck Protection Program?

The PPP provides low-interest, federally-backed cash-flow assistance in the form of loans to small businesses in the U.S. and its territories. Some important details:

The government will fully forgive the loans “if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities,” says the Small Business Administration (SBA). “Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.”

In the event your business does end up being required to repay a portion of its loan, you can get a deferral on loan repayments for a minimum of six months and up to a maximum of one year, per The Tax Foundation.

Businesses with under 500 employees, which include sole proprietorships, independent contractors and others, can apply for PPP loans if their business was or is affected due to COVID-19 between Feb. 15, 2020 and June 30, 2020.

Some of our favorite sources for more basics on PPP loans:

The SBA’s overview of the Payment Protection Program

Fast Company’s guide to the Payment Protection Program

Who is eligible for Paycheck Protection Program loans?

Here are the general eligibility requirements to apply for a PPP loan:

  • A business or nonprofit with under 500 employees, or one that meets the SBA’s size standards for a small business
  • An individual who operates as a sole proprietor, independent contractor or is self-employed who regularly carries on a trade or business
  • Tribal business that meets SBA size standards

 Special additions to the eligibility requirements:

What can I use the loan for?

The loan can be used for the following items:

  • Payroll, including salaries, commissions or similar compensations
  • Continuing health care benefits
  • Mortgage interest payments
  • Rent
  • Utilities
  • Interest on any other debt obligations

How much money can I get from a Paycheck Protection Program loan?

The size of your potential loan depends on payroll costs. Eligible businesses will get loans of up to 2.5 times their average monthly payroll costs in 2019, up to $10 million. For example, if your payroll costs in 2019 were $10,000 per month, you will get a $25,000 loan (10,000 x 2.5).

There are several online PPP loan calculators that help businesses define estimated loan totals and forgiveness.

When and where do I apply?

The program officially opened Friday, April 3, giving small businesses and sole proprietorships the ability to submit loan applications. Independent contractors and self-employed individuals can submit applications starting April 10. 

You can file an application with the program’s certified lenders, which include both local and commercial banks and other lenders who process SBA 7(a) loans


 While the program is now live, not every lender is consistently accepting applications. 

In other words: While you legally can apply for a loan now, your bank may not be fully processing applications, or even accepting them. Larger banks, like Wells Fargo, have hit roadblocks as they attempt to accept, process and back loans. Smaller banks and other lenders say they have struggled to get the level of detail needed to close a loan from the federal government. Various local news sites report many business owners don’t have closing dates or final paperwork from their banks, even after submitting applications.

Business owners are expressing confusion on Twitter, where independent consultants and Chambers of Commerce are offering conference calls to help entrepreneurs make sense of the application process. 

Meanwhile, the White House tweeted a story about a Montana coffee shop that qualified for a loan in a hassle-free process on the Program’s launch date. CBS News likewise interviewed a North Carolina coffee company that secured a loan and is rehiring folks it previously laid off. 

Still, other reports tell of frustrated small business owners who fail to meet the lending requirements at national banks, many of whose application portals have intermittently launched, shut down and launched again.  

Here’s the current status of the loan application process at national banks:

Large banks’ loan application processes are frequently changing. We’ll continue updating them above. To determine how to submit your loan application at a local lender, check their website or call them up.

What information do I need to apply?

During the application process with your PPP lender, you’ll need to fill out the Paycheck Protection Program Borrower Application Form.

The simple form should take less than 20 minutes to complete, as long as you have all the required information ready. Here’s what you need:

 I. General info

  • Business legal name
  • Business address
  • Business taxpayer identification number (EIN, SSN)
  • Primary contact (business phone and email address)

 II. Payroll Calculation

  • Average monthly payroll
  • Number of employees

To see what applies as an eligible payroll expense, review this breakdown from Tax Foundation, a leading independent tax policy nonprofit. 

When will I hear back about my loan application? 

Similar to the process for obtaining SBA Economic Disaster Loans, you’ll have to wait to hear from your lender for next steps after submitting your PPP loan application. Still, it’s best to get your application in as soon as possible.

 👉 In the meantime, here are other sources of potential financial aid for your business, including SBA Disaster Loans -- which you can receive in addition to a PPP loan, so long as you don’t use them for the same purpose.

 🙋‍♀️As businesses face speed bumps due to the coronavirus, we're here to help with the nitty-gritty -- from finding financial relief to building a business continuity plan. Got a topic you'd like us to cover in an upcoming article? Let us know.