The Paycheck Protection Program (PPP) is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. Currently, there is $349 billion available to US small businesses on a first come first serve basis. The PPP is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19.

In short, as a provider, if you believe you need these funds, begin the application process immediately. Prepare to be patient, but persistent. Lending institutions and banks are grappling with this information as millions of requests are pouring in. Most businesses are eligible immediately. Sole Propriertorships and Independent Contractors may begin applying on April 10.

The US Small Business Administration (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.

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution or federally insured credit union. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender or bank as to whether it is participating in the program.

Lenders are beginning to process loan applications NOW. The Paycheck Protection Program will be available through June 30, 2020.

There are many Oregon banks qualified to handle the PPP loans, but remember they are scrambling to be equipt to handle a $350 billion program that was rolled out in 7 days. Most banks are indicating they prioritizing their current clients for the applications, so start with your own lending and/or banking institutions. Each bank will have its own modified processes and applications for this program, so please pay attention to the instructions your bankers are giving you on the details they need to process your applications.

The maximum loan amount is:

  • PPP loans are available in amounts up to the lesser of:

$10,000,000 or

An amount equal to one month of Payroll Costs, calculated above (subject to the $100k cap per employee) and on a trailing 12- month average basis multiplied by 2.5.

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees. 

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. Documentation is absolutely necessary. Keep all records! Without appropriate documentation your forgiveness on the loan will be in jeopardy.

This loan has a maturity of 2 years and an interest rate of 1%.

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.

SBA provides local assistance via 68 district offices and a nationwide network of resource partners. To find resources near you, click here.

PPP Borrowers Fact Sheet

Oregon SBA Lenders List

Who CARES About the Employee Retention Credit When You Have the SBA Loans — You Do, If You Have Too Many Employees for an SBA Loan or the Banks Already Made Loans for the $349B Available for the SBA Loans

Affiliation Under the CARES Act PPP Provisions

Why Everyone CARES About SBA Loans: Paycheck Protection Program and Economic Injury Disaster Relief for ‘Small’ Businesses

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