The Paycheck Protection Program (PPP) – What We Know & Where to Apply

Closed Businesses Can Still Make Payroll with Paycheck Protection Program

If you’re like me and you run a small business, you could qualify for the Paycheck Protection Program (PPP).

This looks to be a promising opportunity for small business owners and the self-employed to recoup some of the damages inflicted by the economic and social effects of COVID-19 and the subsequent government response.

The PPP will allow you to continue to pay yourself, your employees, and possibly your independent contractors (those you issued a Form 1099) for an eight week period through June 30, 2020!

Look, I’m no fan of taking out loans for your business. But this particular program essentially created a grant (free money) for you to use to pay your employees, as well as your rent (see below for all qualifying expenses), through this rough patch we’re experiencing.

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April 24, 2020 Updates:

  • Today the President signed into law the PPP “Enhancement” Act. This adds an additional 320 Billion to the program. The SBA will start processing applications again next Monday, the 27th at 10:30 AM ET.
  • Get your application (re)submitted to an approved lender ASAP. I’d recommend your own business banker, as well as a number of FinTech options, like BlueVine via Nav, Kabbage, LoanBuilder by PayPal, and Lendio. There is no risk from submitting multiple applications.
  • I finally heard from Chase about my other two businesses. One is ready to be submitted to the SBA by Chase on Monday. The other loan was apparently held up by an error. I apparently didn’t include the correct payroll documentation. Chase encouraged me to re-submit my application and stated that they would “consider [my] earliest submission date when processing [my] new application.” I resubmitted my application today.

April 18, 2020 Updates:

  • As I’m sure you’ve heard, the funding for the PPP has run dry. I’m hopeful Congress will appropriate more funds next week, but I would not be surprised if it takes longer or the extra funds never materialize.
  • While I’m disappointed that the funds ran out so quickly, I’m mostly disappointed in my business banker, Chase. They left me in the dark throughout the entire process. While I was able to get one loan funded through them, my other two (larger) loans didn’t get funded AND they never told me otherwise.
  • Had I known Chase wasn’t going to fund me – which we now know they prioritized certain businesses over others and didn’t fund loans in order of application – I would have applied elsewhere.
  • So today I’m starting the process of applying with Bluevine through Nav.com and LoanBuilder by PayPal. Yes, at both places, for both businesses. Yes, this means I’m making multiple PPP applications. But this is the choice I’m left with, and I’m only sorry I didn’t do this earlier. I strongly suggest you consider doing the same.

April 16, 2020 Updates:

  • Yesterday at 4:15 PM I received an email from Chase that one of my PPP loans had been approved. The email stated that “Chase will deposit your loan funds into your oldest Chase Business Banking checking account within the next three business days.”
  • This morning I got funded! I just noticed a couple of new pending deposits into my business checking account. One for the amount of my approved PPP loan, and one for $2,000 ($1,000 for each of my employees), which I’m assuming is the EIDL advance. See screenshot below.

Chase PPP and EIDL Funding Payments Pending

April 14, 2020 Updates:

  • Still no word from Chase on my PPP loan application. I did receive the random email from the SBA officially confirming that the EIDL advance will be given out in $1,000 per employee increments. Those who have already received the EIDL Advance have reported getting this email three days before funding.
  • Also, the Treasury issued a new Interim Final Rule addressing the requirements for the self-employed when applying for the PPP loan. Notable takeaway: if you are self-employed and haven’t filed your 2019 taxes, you need to fill out a 1040 Schedule C and turn it in with your PPP application. Line 31 from the Schedule C should be used in your payroll costs calculation.

April 9, 2020 Updates:

    • I haven’t been approved or funded for my PPP applications. I talked to my Chase banker today and she didn’t have much of an update other than saying (1) some Chase business customers have received funding for their PPP, and (2) I should just watch my email for approval info.
    • Additional funding for the PPP hasn’t passed yet, but it was promising to see it go up for a vote in the Senate so quickly.
    • Capital One hasn’t opened up PPP applications for their small business customers.
    • Senator Shaheen issued a letter to the Treasury and the SBA urging them to change their ruling regarding the $10k EIDL grant.

April 7, 2020 Updates:

April 6, 2020 Updates:

        • The Chase online application for PPP is up! You can visit https://recovery.chase.com/cares1/sba-loan-forgiveness to get started with your app if you are a current customer (you are required to login).
        • I applied for my businesses. I submitted my W-3, a summary sheet showing how I made the Payroll Costs calculation (I just made it quickly in Apple Notes and saved it as a PDF), and I also uploaded my 2018 business tax return. That’s it! I’m in!
        • In EIDL news, this press release from the Massachusetts SBA came out today and noted, among other FAQs: “EIDL Loan advances will start to be distributed this week. $1000 per employee up to $10,000 max”.

Chase PPP Document Uploader

Chase Application Accepted for PPP

April 5, 2020 Updates:

        • Chase emailed me today letting me know that soon I would be notified about 1. their online application portal being open, or 2. applying for the PPP over the phone with a business representative.
        • Documents I have ready for my application as soon as Chase opens the gates: completed & signed Form 2483, 2019 W-3 Form, 941s for all 2019 quarters, 940 for 2019, my Texas franchise tax certification, and a Addendum with a listing on all the businesses I own.
        • I created a central place for all COVID-19 resources from my website. It includes CARES Act info, tips for making money during this time, and tips for your personal finances.

April 4, 2020 Updates:

        • I just heard from a friend on Twitter who’s in touch with a Chase bank Business Relationship Manager, “We are strenuously working to get a website based application up and running. Until then, Business Relationship Managers like myself will be calling business customers to take formal applications this weekend and beyond.” That’s promising. My relationship manager hasn’t called me yet.
        • Nav just went live with their full application, saying “this secure, digital application will feed directly into your official application once lenders come online early next week.” I’ve been told by a Nav rep that you will have a chance to officially submit this application once they’ve matched you. So, if you wanted to apply to this, it won’t duplicate your efforts, with say Chase, once they have something up. Hedge your bets, basically. (full disclosure, Nav will likely be getting a commission from the bank they ultimately refer you to, and I may be getting a percentage of that commission as well)
        • After some further thought, I’ve decided to leave my 1099 contractors out of the equation. I’ll email them next week to suggest they apply for the PPP themselves next Friday, the 10th. Hopefully, the EIDL $10k grant comes through and I can use that to fund contractor activity for the next month or so.
        • Bank of America is changing their PPP policy to allow for all business customers to apply, not just those with existing loans.
        • A small business owner with less than 50 employees reported on Reddit 2 hours ago that they were officially approved for funds.
        • I was quoted in Forbes on the negative fallout of the initial days of the PPP launch. Follow Ryan Guina on Forbes for more updates.
        • Excellent Twitter thread from Senator Rubio on the problems currently between banks/SBA/Treasury that he’s committed to helping clear ASAP.
        • President Trump tweeting about increasing funding for PPP:

April 3, 2020 Updates:

I have not been able to submit my application. But, I’ve placed myself into the Chase PPP “queue”. If you’re a Chase business customer you can head to https://recovery.chase.com/cares1/sba-loan-forgiveness and fill out the two page form. At the end, you’ll find out that Chase now needs to speak to you directly to complete the application. Here’s the screenshot:

Chase PPP Queue Next Steps

The form they reference in the note is the new SBA PPP form linked below.

Most other big banks aren’t taking applications. I’ve heard of no online portals being open with the exception of Bank of America, who has opened a portal for existing business loan customers.

Secretary Mnuchin keeps tweeting progress from his SBA reporting information. Where is this activity actually happening other than BOA?

It’s frustrating.

Midnight April 2, 2020 Updates:

Right now believe it or not there is still confusion on the inclusion of 1099 contractors in your payroll cost calculations. The final rules from the SBA are out and although it explicitly says independent contractors are excluded from their employer’s payroll cost calculations, it does state that you are eligible if:

“You were in operation on February 15, 2020 and either had employees for whom you paid salaries and payroll taxes or paid independent contractors, as reported on a Form 1099-MISC.

What I’m doing: It’s past midnight on the East Coast and so I’m making a last-minute judgment call to include my 1099 contractors in my payroll calculations. I’m submitting my applications (here’s the new final form) with that data included. I’ll report back with what the bank says tomorrow.

Now with regard to the banks, several closed business for the day before Secretary Mnuchin issued the final rules. And on their way out the door, they said they were NOT going to be processing PPP applications on Friday, April 3rd. This includes my bank, Chase.

Since there are a limited number of funds available and this will be a race to see who can get their applications in first, I am searching for alternative banks. My advertising partner, Nav (the small business lending broker and credit score company) sent an email tonight explaining that they “will collect the same information as a bank and match you to multiple SBA lenders as they come online.”

I’ve submitted my pre-application with Nav and I’ll wait to hear from them overnight or first thing in the morning. My second option is FNBO. They have a branch near my home and I’ve been in contact with them today and they said they would let non-customers apply with them.

That’s it for now. I’ll update you when I have more info.

April 2, 2020 Updates:

        • Official statement from Chase bank: “Financial institutions like ours are still awaiting guidance from the SBA and the U.S. Treasury. As a result, Chase will most likely not be able to start accepting applications on Friday, April 3rd, as we had hoped.”
        • In today’s White House Press briefing Secretary Mnuchin stated that the program WILL launch tomorrow, April 3rd. And the interest rate will now be set at 1%.
        • It’s here. The interim final rule from the SBA on the PPP. I’m digging through this now and I did spot that independent contractors are, in fact, to be excluded from the payroll cost calculations. I’m assuming banks are absorbing this now and implementing this and the new final application into their systems. Applications for the PPP should be able to start tomorrow!

April 1, 2020 Updates:

        • Important Update re: Using Independent Contractors in your Payroll Costs Calculation – I’ve had a chance to analyze the Treasury guidance to borrowers and the sample application and I’m fairly certain that their stance to SBA lender banks will be to only use your full-time and part-time employee payroll data to establish your payroll costs, and therefore, your loan amount. This is disappointing because (1) I think the law actually speaks to allowing contractors in your payroll costs calculations, and (2) many small businesses only use independent contractors. Now, these employers won’t be able to use that data for their loans. This is an evolving situation, so this may turn out to be a non-issue.
        • President Trump stated during his March 31 daily press briefing that PPP applications will be taken starting this Friday, April 3rd. The Treasury Dept issued guidance to borrowers, lenders, and a sample application. Highlights from Treasury guidance to borrowers:
          • Small businesses can apply April 3 and self-employed can apply April 10.
          • This loan has a maturity of 2 years and an interest rate of .5%.
          • Not more than 25% of the forgiven amount may be for non-payroll costs.
          • Loan payments will be deferred for 6 months.
        • Chase just emailed some of their business customers stating: you need a Chase business checking account to apply with them; the application with Chase will be entirely online. Chase also shared what information should be needed for the application. See below.
        • Calculate your maximum loan amount using the PPP Loan Calculator below.
        • Ready to apply? Jump to the list of banks and institutions currently taking pre-applications. Banks should begin taking full applications from small businesses by Friday, April 3 and from the self-employed by April 10. This is a confusing distinction likely caused by a rush to get this out. The implication here is that if you have employees you can apply on the April 3 date, but if it’s just you and your net earnings, you’ll have to wait to April 10 to apply.
        • Consider also applying for the EDIL at SBA.gov now that they have a streamlined application and you may qualify for the forgivable $10,000 grant. You might be able to have both the EDIL and the PPP depending on your expenses.
        • I joined Rachel Brenke for a special episode of the Business Bites Podcast to discuss the Paycheck Protection Program. Listen in…

All three of my businesses were (and should continue to be) negatively affected by COVID-19. Sales are down, partnerships have been dissolved, booked deals were lost or postponed indefinitely, and in some cases, even changes in service provider technology has disrupted business as usual. Therefore, I’m applying for a PPP loan for all three businesses.

After I did some research and spoke with others familiar with the program, I decided to share what I found out here. I’ll keep this piece updated as I get more information and work through the application process.

Disclaimer: I’m not your CPA. I don’t know your particular situation. The information I’m sharing in this article is just information, not individual advice. Don’t act on anything without working with your CPA or other professional first.

Note that the newly enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act includes a number of things (like those personal stimulus checks), but in this piece, I’m focused on the $350 billion section known as Paycheck Protection Program or PPP (also know as the Small Business Interruption Loan in the Senate version of the bill).

Quick Summary of the Paycheck Protection Program Loan

        • Rate: 4% fixed 0.5% 1.0%
        • Amount of Loan: 2.5x average monthly payroll (including owner & 1099 contractors)
        • Terms: Up to 10 2 years
        • First 6-12 months of payments are deferred
        • No collateral or personal guarantee required
        • Loan forgiveness on funds used for qualifying expenses (e.g. payroll, rent, etc.)
        • Application will go through SBA approved banks – possibly your own business bank

Yes, you read that correctly. The loan is 100% forgiven (essentially making it a grant) for all of your qualifying expenses.

This is money the federal government is dumping on our economy through small businesses to help us ensure people get paid salaries and for contract work. If you’ve been affected and you’ve got staff you continue to support I encourage you to apply.

Related: How to Get Unemployment Pay if You’re Self-Employed (Including Gig Workers and Freelancers)

Paycheck Protection Program Details (eligibility, loan amount, timing, forgiveness, etc)

Eligibility. To be eligible for the PPP you must be a small business, sole proprietor, “side hustler”, or non-profit that has fewer than 500 employees. You must have been in business prior to February 15, 2020. And you generally need to (or expect to) experience negative effects from COVID-19 on your business (e.g. loss of sales). Specifically,

“An eligible recipient receiving loan forgiveness under this section shall make a good faith certification that the uncertainty of current economic conditions justifies the loan request to support the ongoing operations of the borrower, and acknowledges that funds will be used to retain workers and maintain payroll.”

From my understanding so far, this program has a very wide application.

Loan Amount. You can borrow up to the lesser of 2.5 times your average monthly (U.S. based) payroll for the last 12 months, or $10 million dollars. “Payroll” generally includes salaries and benefits minus the payroll taxes paid and is capped at $100,000 per employee.

You can also include amounts paid to U.S. based part-time workers and contractors in your payroll calculations. Update: It looks like the Treasury is interpreting the law in a way that would not allow you to use independent contractors in your payroll cost calculations. I personally think they are ignoring the “compensation to” portion of the sentence below, but I’m not the Treasury and I don’t get to make the rules.

Independent Contractors Included in Payroll Costs Calculation for Paycheck Protection Program

You don’t need to put up collateral and you don’t need to pay any fees to initiate this loan.

Calculate your loan amount. As an example, let’s say you paid $150,000 in salaries and $50,000 in benefits over the designated timeframe. You would have a total of $200,000 in total payroll costs. You would then divide that number by 12 to get your average monthly payroll of $16,667. You would be eligible to borrow 2.5 times that amount, or $41,667.50, through the PPP.

Loan forgiveness. Now here’s the exciting part. Any qualifying expenses you incur in an eight week period during the program window (starting from the date of your loan and ending no later than June 30, 2020), are eligible for loan forgiveness.

Qualifying expenses include salaries, of course. But they also include rent, mortgage payments, group health insurance payments, utilities, interest on debts, and some other minor expenses.

Paying back the loan. Each bank will have to develop a process. But generally speaking, at the end of the eight weeks, you simply show evidence of your qualifying expenses to your lender bank and they forgive the equivalent amount on your loan.

Any remaining loan amount will then need to be repaid. You’ll have up to 10 2 years to pay back the loan, at a fixed rate of 4% maximum 0.5% 1%. The first 6 to 12 months of payments can be deferred.

Paycheck Protection Program Calculator

Enter your business’ total payroll cost data in the fields below and calculate your maximum loan amount under the Paycheck Protection Program.

Temporarily Unavailable

 

Seasonal Employee PPP Calculator

Nav Paycheck Protection Program Calculator

Our partner Nav has a helpful calculator that takes into account any seasonal employees you have. Try it out.

Banks/Lenders Taking Paycheck Protection Program Applications

You have until June 30, 2020, to apply. But these loans will be issued on a first-come, first-served basis. I would apply quickly.

Banks should begin taking full applications from small businesses by Friday, April 3 and from the self-employed by April 10.

Since the federal government is using the SBA existing program to deliver these loans you should be able to apply for the PPP at any of the current SBA approved banks and even more banks as long as they are FDIC. There is no listing (from what I can see) of these SBA approved banks.

The SBA website normally funnels you to a bank using a matching program, but their system doesn’t appear to be working currently.

Over social media I’ve discovered several banks & institutions already taking contact information (not full-blown applications yet) for those interested in applying for the PPP:

        • Nav (broker who will match you with banks taking applications – might be the fastest way to apply)
        • US Bank (now taking online applications with current customers; opening to non-customers soon)
        • Sunrise Banks (now taking applications by email)
        • Key Bank (open to customers)
        • Live Oak Bank (only working with existing customers; suggesting non-customers look elsewhere)

While these aren’t full applications yet, these banks are signaling that they will be quick to roll out these loans. A good sign if you are considering one of the above banks.

A good indicator for which banks might be able to act quickly is who has historically produced a lot of SBA loans. This information is public, and you can actually see from the March 2020 data who the top SBA lenders are.

Beyond those banks, the lender StreetShares has a PPP calculator that will help you estimate your possible loan amount. They promise to put you in touch with an approved bank very shortly.

I’ve contacted all of these banks, including my own bank, Chase. My Chase banker got back to me and shared that she’ll be calling me as soon as they get guidance from the SBA. She also shared a landing page with me where updates to the Chase process will be released.

I’ll likely apply with Chase for all three loans, but we will see.

Paycheck Protection Program Application Form

Here is the final (fillable) form from the SBA that you can use to apply for the Paycheck Protection Program.

The SBA released a sample application form earlier, but this final version had some slight tweaks.

Documents Needed to Apply for the PPP

I’m starting to gather the following information:

        • Evidence of my business start date. Tax ID issuance and LLC formation documents should do.
        • Payroll Records from the last 12 months, including 1099s I issued.
        • Annual profit/loss statement.

You should be able to grab this information from your payroll system records and bookkeeping records. Reach out to your bookkeeper and they should be able to help.

Other Questions About PPP

What if you have multiple businesses? As long as each business meets the eligibility requirements you can apply for a separate loan for each entity. Each loan will correspond with a unique federal Employer Identification Number (EIN).

What if you are the only employee? If you pay yourself a salary, you can include that in your average payroll calculations. If you don’t officially pay yourself a salary and just take your net earnings home, you will likely need to apply on April 10 as a self-employed person and use your net earnings in your calculations.

How does the PPP differ from the Small Business Administration’s Economic Injury Disaster Loan (EIDL)? Although both are SBA loans, these are different programs.

The EIDL is administered by the SBA directly. The PPP is administered by SBA approved banks. The EIDL is not eligible for forgiveness (although it does have a possible $10,000 max grant component that is). The PPP is eligible for forgiveness.

Can you have both loans? Yes, but you need to use the funds from each for different expenses.

If you have applied for (but not accepted) the EIDL loan, you can still wait to see if you get the PPP loan and then just take the one you prefer.

The final application form for PPP shows that if you have an existing EIDL, you have to add it to your PPP loan.

There’s some confusion around this and so all I can tell you is here’s what I’m doing: I applied for the EIDL at https://covid19relief.sba.gov/#/ and checked the $10,000 grant box during the application. I don’t plan on taking the actual EIDL loan, but I will take the $10,000 grant portion and put it to use immediately. The SBA says this will happen in 3 days!

As soon as the PPP application becomes available I will apply for that. Loans should close a few days or weeks later. I’ll then take the PPP funds and put them to use on my eligible expenses over the next 8 weeks.

Should you apply for PPP if your business can survive without it? There’s a definite grey area here. Do I really need this loan to get by? Maybe not. But my financial preparedness has nothing to do with true economic damage (currently and potentially) done to my businesses at the hands of the government.

Do these economic damages precisely equal the amount I’m taking out (2.5x my monthly payroll?)? Probably not yet. But the government is not asking me to take a loan out based on my actual losses. The reason?…no one knows what will happen next.

This is being dumped on us in a very uncertain time. Nothing is known. If you have employees and contractors you are supporting, take this money and ensure they get paid over the next 8 weeks.

More Guidance & Sources on PPP

Correction (March 30, 2020): The previous version of this piece linked to the Senate version of the CARES Act which did not include a reference to independent contractors being included in the payroll costs calculations. We’ve updated our link to the final version of the bill, H.R. 748, which was signed by President Trump and includes the section “(bb)” on including independent contractors in your payroll costs calculations. Second Correction (April 1, 2020): Now that the Treasury guidance is out on this bill it appears as though independent contractors will NOT be included in payroll cost calculations unless they have a 1099.

Other Lending Options

1. Personal Loan Options

If your personal expenses are mounting, consider a personal loan rather than running up high-interest credit card balances. Check out Fiona to compare offers in less than 60 seconds.


You can also obtain a loan from LendingTree.

Check your credit score now using a service like Nav.com and then use Experian Boost to try to increase your credit score before you apply.

2. Home Equity as Another Option

The traditional way of tapping into home equity is to obtain a home equity loan or HELOC through a bank or a lender. You are charged an interest rate, have to pay assorted closing costs and must commit to making monthly payments – in addition to your regular mortgage payments. If you are interested in a HELOC, consider using Figure. You can apply in minutes and, if approved, you can receive the money in as few as 5 days.1 

However, in this new exploding FinTech landscape, innovative ways to tap into your home’s equity are popping up. And some of them are quite promising like Unison.

For those who already own your own home and have equity you want to tap into, the Unison HomeOwner program allows you to do that without getting a loan and without monthly payments.

Click here to learn more about Unison’s HomeOwner program and see if you qualify.

3. Consider Other SBA Loans

If you need funding for your small business, it’s hard to beat SBA loans. They come with favorable terms and may be easier to qualify for than other business loans.

But as with any government-sponsored initiative, the SBA loan program can be confusing. There are multiple SBA loans, each with different purposes and terms. But in this guide, we’ll cut through the clutter to give you the most important answers that you’re looking for.

Read: Everything You Need to Know About SBA Loans

What questions or concerns do you have about the Paycheck Protection Program? Have you applied?


1 Five business day funding timeline assumes closing the loan with our remote online notary. Funding timelines may be longer for loans secured by properties located in counties that do not permit recording of e-signatures or that otherwise require an in-person closing.

Avatar About Philip Taylor, CPA

Philip Taylor, aka "PT", is a CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of the personal finance industry conference and trade show, FinCon.

He created Part-Time Money® back in 2007 to share his advice on money, hold himself accountable (while paying off over $75k in debt), and to meet others passionate about moving toward financial independence.

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  1. can an employer get ppp loan and exclude some employees? Can the Freedom of Information Act be used to see salaries that were used or is all salaries from 2019 used when applying for this? What does an employee do if he has been used for this program and has not received any of its benefits? my employer said she can loan me some money but i have to pay her back altho i worked last year and was working this year for her and the 2 other employees got ppp. she runs a public stable and a therapy riding facility. any information would be appreciated. would like to get what is due nothing less or more. thanks