PPP Loans: The Ultimate Guide

PPP Loans: The Ultimate Guide

PPP Loans: The Ultimate Guide

What is the Paycheck Protection Program?
The $349 billion program was enacted as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The provisions in the CARES Act are authorizing SBA to temporarily guarantee loans under a new 7(a) loan program, the "Paycheck Protection Program" (PPP). Loans guaranteed under PPP will be 100% guaranteed by SBA and the full principal of the loans may qualify for loan forgiveness. The idea of PPP is to help businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

Eligible Entities
  • Small businesses that have 500 or fewer employees
  • Businesses that were in operation on February 15, 2020
  • Had Employees for whom you paid salaries, payroll taxes or paid independent contractors
  • Self-employed individuals/independent contractors

Loan Details
  • 1% interest rate
  • First-come, first-served
  • A maturity of 5 years
  • The entire amount will be forgiven if an applicant maintains at its payroll costs over the eight-weeks
  • The forgiveness will be reduced by the percent decrease in the number of employees
  • Loan payments are deferred for 6 months 
  • Nor collateral or personal guarantees are needed
Ineligible Entities
  • Businesses with more than 500 employees
  • The individual receiving paid sick leave or other paid leave benefits are not eligible. However, employers with fewer than 50 employees may claim an exemption.
  • Household employers (individual who employ nannies, housekeepers)
  • Individuals who are engaged in any illegal activity under federal, state or local law
  • Individuals/Businesses that have defaulted within the last seven years 
How Much You Can Borrow
  • Up to $10 million
  • The calculation is 2.5x the average monthly “payroll” costs, measured over the 12 months preceding the loan origination date
  • If you took out the EIDL loan between February 15, 2020, and June 30, 2020, and you want to refinance that loan into a PPP loan, you would add the outstanding loan amount to the “payroll” sum.
How The Funds Can Be Used
  • Rent, payroll, mortgage interest or utilities
  • At least 60% of the PPP loan proceeds shall be used for payroll costs
  • Must spend until December 31, 2020

Application Documents
  • Payroll documentation
  • Paycheck Protection Program Application Form

How Soon Will Businesses Receive Money?
It will depend on your lender and your application date. 

Check out our Frequently Asked Questions sheet.

How to Apply
Available through SBA lenders such as Huntington, PNC, Wells Fargo Bank, KeyBank, Citizens, Bank of America, First Commonwealth, Enterprise Bank. 

The loans will be available from April 3rd, 2020 through June 2020. 

Reach Out to Us
As Duquesne Small Business Development Center, we are here to serve you and provide you the resources that you need to get through this challenging time. We can help you go through the application: identify the documents and prepare the package for submission.

If you have any questions regarding the application process, please email us at duqsbdc@duq.edu or call us at 412-396-1633.

Please know we feel your pain and passionately believe in the vital importance your businesses play in the overall economy. We are here to serve you and will continue to do so and we will get through this!

Comments (0)