The PPP provides loans to small businesses so that they can keep their workers on the payroll. The Paycheck Protection Program Liquidity Facility will extend credit to eligible financial institutions that originate PPP loans, taking the loans as collateral at face value. The simplified SBA Form 3508S is now available, in addition to the revised SBA Form 3508EZ and SBA Form 3508 applications.

• PPP loan recipients could use up to 40% of loan proceeds for non-payroll costs, although the list of authorized uses did limit non-payroll spending.
• In contrast, we find that for firms that are rated below investment grade, the likelihood of secured debt issuance increases as firm credit quality deteriorates, the economy slows, or average credit spreads widen.
• The report shows how systemic problems in the program meant that businesses and workers in need lost out while businesses not in need cashed in.
• Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.
• California conforms to the federal gross receipts test requiring a 25% or greater reduction in gross receipts and will therefore follow the rationale of this related federal guidance.

Explore by Agency See how much money federal agencies received, how much they’ve spent, and what they’ve spent it on. Interactive Dashboards Dig into all pandemic funding data or get the details on specific programs, like the Paycheck Protection Program and the State and Local Fiscal Recovery Fund. Click here for Frequently Asked Questions, including greater detail about how the reports are calculated. Seasonal employers may compare the average FTEEs employed during the Covered Period or Alternative Payroll Covered Period to either period listed above or to any consecutive twelve-week period between May 1 through September 15, 2019. Explore our full range of payroll and HR services, products, integrations and apps for businesses of all sizes and industries.

Loan Forgiveness Checklist

The Paycheck Protection Program Flexibility Act provides that at least 60% of the covered loan amount must be used for payroll costs. If less than 60% of the loan amount is used on payroll costs, the amount of the loan that is forgiven may be reduced. The Treasury Department has indicated that at least 60% of the loan forgiveness amount must have been used for payroll costs.

The SBA has also released Interim Final Rules explaining the direct borrower forgiveness process, appeals deferment, and the COVID Revenue Reduction Score [SBA Release No. 21-58]. The Paycheck Protection Program was introduced in 2020 to provide COVID-19 pandemic relief to small businesses – primarily to maintain their payroll, hire back employees who have been laid off, and cover other expenses like rent, interest on mortgages and utilities. The program was initially included in the CARES Actby granting the U.S. Small Business Administration permissions to lend money to eligible businesses in need. How will the determination of whether my business has maintained staffing levels be made? To determine whether staffing levels have been maintained, the average number of full-time equivalent employees during the applicable Covered Period or Alternative Payroll Covered Period will be compared to one of two time periods.

Trial readiness, process & case guidance

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. On March 13, 2020, President Trump declared the ongoing Coronavirus Disease 2019 (COVID-19) pandemic of sufficient severity and magnitude to warrant an emergency declaration for all states, territories, and the District of Columbia. With the COVID-19 emergency, many small businesses nationwide are experiencing economic hardship as a direct result of the Federal, State, and local public health measures that are being taken to minimize the public’s exposure to the virus. These measures, some of which are government-mandated, are being implemented nationwide and include the closures of restaurants, bars, and gyms. In addition, based on the advice of public health officials, other measures, such as keeping a safe distance from others or even stay-at-home orders, are being implemented, resulting in a dramatic decrease in economic activity as the public avoids malls, retail stores, and other businesses.

Documentation verifying the number of full-time equivalent employees on payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight week period following this loan will be provided to the lender. More broadly, this paper joins a literature focusing on how government interventions following crises impact recovery and the broader economy (Agarwal, Amromin, Ben-David, Chomsisengphet, Piskorski, Seru, 2017, Mian, Sufi, 2012, Zwick, Mahon, 2017). Specifically, we offer a comprehensive evaluation of the role that banks played in allocating PPP funds, and the impact that this force had on program targeting and economic outcomes. Our paper contributes directly to this literature by showing how policy transmission depends on the agents delegated to deploy it (e.g., banks). These results are consistent with those of studies that emphasize the importance of proximity (Granja et al., 2018), as well as emerging evidence from the pandemic that firms with pre-existing borrowing and lending relationships received access to PPP funds faster than their counterparts .

How much PPP funding can I receive?

A business that received applied for a PPP loan before May 5 will not be subject to penalties for interpreting the 500-employee threshold for only counting its employees in the United States. Businesses that receive PPP loans on or after May 5 must count all employees worldwide for purposes of the 500-employee threshold. A faith-based organization may disregard the number of employees of its affiliates if the connection between the two organizations is based on a religious teaching, religious belief, or is otherwise a part of the exercise of religion. The affiliation rules do apply, however, if the affiliation is solely for non-religious reasons, such as administrative convenience. The application should include a written statement explaining the reason the applicant believes it qualifies for the affiliation exception.

We are starting to accept The Paycheck Protections for the Small Business Administration’s Paycheck Protection Program. To manage volumes, at this time, we will be reaching out to existing Citi Small Business Banking clients in phases. « New rule means Watertown business owner may now qualify for Paycheck Protection loan ». Rent payments are allowable if the business lease was first obligated prior to February 15, 2020.

If these records were unavailable, a lender could accept bank records if they sufficiently demonstrate the qualifying amount. Businesses were required to certify that pandemic-related economic uncertainty made the loan request necessary to support ongoing operations and that funds would be used as required. One new analysis found that only about a quarter of the money spent by the program paid wages that would have otherwise been lost, partly because the government steadily loosened the rules for how businesses could use the money as the pandemic dragged on. And because many businesses remained healthy enough to survive without the program, another analysis found, the looser rules meant the Paycheck Protection Program ended up subsidizing business owners more than their workers. Refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020. If you received an SBA EIDL loan from January 31, 2020 through April 3, 2020, you can apply for a PPP loan.

• The data offer a clear look at which lenders are most active in disbursing loans, how program participation evolves over time, and the geographic distribution of PPP lending across the US economy.
• Nevertheless, an accounting firm is allowed to charge a business for providing advice on deciding which loan program and tax relief program would be best for their business.
• Any non-payroll costs that are partially incurred during the covered period may be included in loan forgiveness only for the portion incurred during the covered period and paid by the next regular billing date.
• Under the PPP, the maximum loan amount is the lesser of $10 million or an amount that you will calculate using a payroll-based formula specified in the Act, as explained below.
• Supplier costs—any purchase order or order of goods made prior to receiving a PPP loan essential to operations.
• In the NIPAs, PPP loans to businesses that are forgiven are classified as a subsidy to the employers.
• Please be sure to understand and comply with the guidance issued by the SBA.