The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) strives to provide financial relief for millions of Americans who have faced economic hardship as a result of coronavirus. It also supports small businesses who have been hit financially due to the pandemic.

One important component of the CARES Act is the Paycheck Protection Program (PPP). Essentially, the PPP is a loan designed to help small businesses sustain and keep Americans employed without leaving them with excessive amounts of debt once the crisis is over

Who is Eligible?

Your can apply for the PPP if:

  • You’re a small business, 501(c)(3) nonprofit, or a 501(c)(19) Veterans Organization based in the United States.
  • You have fewer than 500 employees.
  • You are self-employed or a sole proprietor.
  • Your business has been significantly impacted by COVID-19 and the current uncertainty makes it difficult for you to operate. 
  • You’ll have trouble keeping your business afloat without this loan.
  • Your business was fully operational on February 15, 2020, with employees who you pay via payroll.

If your business has not been impacted yet, rest assured you have until June 30, 2020 to apply. 

How Much Can I Borrow?

If you’re a small business, you may be eligible for a loan that’s up to 2.5x your average monthly payroll costs for the past 12 months. The maximum amount is $10 million. If you’re a sole proprietor or self-employed, your payroll costs for the previous 12 months will dictate your loan eligibility. Your full amount may be up to $100,000. Interest rates will not exceed 4% and the maximum term is 10 years.

The  loan period will last for eight weeks from the date you officially receive the funds. While your loan will be due after the eight week period, your payments will be deferred for anywhere between six to 12 months. There are no prepayment penalties. 

Fortunately, there is no collateral or personal guarantee requirement. In addition, the government and lenders will not charge any fees.  

What Can I Use the Loan For?

You can put the loan funds toward activities that will keep your business running and people employed. These may include:

  • Payroll expenses.
  • Paid, sick, medical, family leave costs.
  • Insurance premiums.
  • Employee salaries and commissions.
  • Interest payments on mortgage obligations.
  • Rent.
  • Utilities including electricity, gas, water, transportation, phone, and internet services.
  • Interest on debts that were incurred before the covered period.

How Can I Apply?

If you’d like to apply for the PPP, reach out to a bank, credit union, or online lender approved by the Small Business Administration (SBA). Since this is a brand new program, you may have to wait for your preferred lender to begin offering it. While you’re waiting, gather payroll documentation, check your credit, and figure out where you stand financially. 

When Can I Apply?

The two start dates for PRP loan applications are as follows:

  • April 3, 2020: Small businesses and sole proprietorships
  • April 10, 2020: Independent contractors and self-employed

Still have a question on the Paycheck Protection Program or other COVID-19 resources available?  Not a problem. Contact Jerad Daley at for further assistance.