Paycheck Protection Program Information Sheet – Borrowers


(PLEASE NOTE: PPP Loan info changes regularly. For the most up to date info, please visit the SBA website.)


The Payment Protection Program is accepting loan applications from small business owners for the third round of funding. If you have not received the relief through the PPP program earlier, you can apply for the first draw of PPP loans. If you had received the compensation through the PPP loan program earlier, you can apply for the second draw of PPP loans.


The Biden administration has introduced some recent changes to the PPP loan program. These changes are aimed at providing more access to small businesses with fewer than 20 employees, self-employed, and sole proprietors.


Here is the information factsheet for the borrowers with recent updates as announced by the SBA.


When can I Apply?

The SBA had opened a 14-day window of the first draw PPP loan application starting on February 24, 2021. It was aimed to provide more access to small businesses with less than 20 employees and self-employed individuals.


All small businesses can still apply for the PPP loans until March 31, 2021.


Where and how to Apply?

You can apply through existing or new SBA lender partners. You can find the lendingpartner through the SBA web section as well. You can download the relevant category PPP loan application form and submit it with the relevant documentation to your lender.


Who can apply? - Eligibility Criteria

All small businesses with less than 500 employees are eligible to apply for the PPP loans. Businesses with greater than 500 employees that meet the SBA standard or industry standard size requirements can also apply for the PPP loans.


Businesses with NAICS code 72 (Food and accommodation) categories that have less than 500 employees at each franchise or branch can also apply.


How many loans can you apply for?

You can apply for only one PPP loan at a time. However, existing borrowers who have received loans with previous funding rounds can apply in the second draw of PPP loans until March 31, 2021, as well.


What is the Maximum PPP Loan Amount?

You can apply for the PPP loan for a maximum of $ 10 million under the current allocation criteria. The Payroll calculations are capped at a maximum of $ 100,000 annual for each employee.


How can you spend the PPP Loan Amount?

You can spend the PPP loan amount for employee payroll expenses and non-payroll expenses as described in the guidelines. You must spend 60% of the total loan amount on the employee payroll expenses. You can spend the remaining 40% of the PPP loan amount on non-payroll expenses such as mortgage interest, rent or lease, utilities, and employee retirement and health insurance contribution plans.


Does the PPP Loan cover Paid Sick Leave?

Yes, the PPP loan program includes all types of payroll expenses including the paid sick leave, parental, or medical sick leave.


What are the costs of PPP Loans?

There are no loan processing or service costs associated with the PPP loans from the lenders or the SBA. The interest rate for the PPP loan is set at 1% only.


How can I apply for loan forgiveness?

Once you have spent the PPP loan amount as per the guidelines on payroll and non-payroll expenses, you can apply for the loan forgiveness with your lender. You'll need to fill the relevant PPP loan forgiveness form and provide the necessary documentation to back your claims. The lender will assess and decide your application within 60 days.


How much of your PPP Loan can be forgiven?

If you use the PPP loan for other than Payroll and allowed non-payroll expenses, you wouldn’t get any loan forgiveness. You'll also need to maintain the employee salaries and hiring retention ratios to apply for forgiveness. Your lender will assess the loan forgiveness application and can approve the loan forgiveness in full, partial, or none.


What is the maturity date of PPP loans?

The maturity date of the PPP loans issued before June 2020 is two years and for the loans issued after June 2020 is five years.


Do you need Collateral or Guarantors?

You do not need any collateral or personal guarantee to apply for a PPP loan. However, your lender may ask for certain documents for security reasons.

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