The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses who maintain their payroll during this emergency.

Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.

Paycheck Protection Program Details

  • Businesses of up to 500 employees are eligible, and businesses in the Accommodations and Food Services Sector are eligible if they have up to 500 employees at each location.
  • 501(c)3 nonprofits with fewer than 500 employees, sole proprietors, the self-employed, and independent contractors are also eligible.
  • All lenders can provide loans and the SBA’s usual requirement that businesses be unable to obtain credit elsewhere is waived.
  • The loans can be for up to 2.5 months of payroll costs, not to exceed $10 million and excluding compensation paid to individuals above $100,000/year.
  • The borrower must certify that the loan will be used to retain workers, maintain payroll, make mortgage or lease payments, and pay utilities, but no personal guarantee or collateral is required.
  • Payments of all fees, principal, and interest is deferred for between 6 months and 1 year.

The portion of the loan equal to payroll costs (subject to the above limit), mortgage interest, rent, and utility payments for eight weeks following the origination of the loan will be forgiven. The loan forgiveness will be proportionally reduced if the borrower reduces employment or salary and wages.

How to apply:

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. 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 as to whether it is participating. All loans will have the same terms regardless of lender or borrower. A list of participating lenders as well as additional information and full terms can be found at

When to apply:

  • Starting April 3rd, 2020, small businesses and sole proprietorships can apply;
  • Starting April 10th, 2020, independent contractors and self-employed individuals can apply;
  • Apply as quickly as possible because there is a funding cap for the program.