PPP Loan Information on the Small Business Paycheck Protection Program

PPP Loan Information on the Small Business Paycheck Protection Program over an image of SBA loan application on desk

Update on PPP Loan Recipients’ Tax Deductions for Upcoming Tax Year

Did you receive a PPP loan?

The IRS is now ruling that they are going to effectively tax you on the proceeds. Congress intended the PPP proceeds to be income tax-free. But now the IRS is going through a back door by removing your payroll expense dollar for dollar effectively making your PPP proceeds taxable. The IRS is creating huge tax liabilities which will be due next year. Read more about it here.

Surprised? We are as well. We suggest you call Congress now.

Russ Duker, Senior Vice President – May 6th, 2020

President Trump signed the CARES Act into law on Friday, March 27th which opens up $349 billion dollars to be lent directly to small businesses via the Payment Protection Plan (PPP). Since a PPP loan is eligible to be “forgiven,” this stimulus package has all the makings to become the biggest banking effort since the Great Depression.

You can begin applying for a Payment Protection Program or PPP Loan, and we’ve compiled a list for you to check your eligibility for a PPP Loan below. NOTE: Applications cannot be submitted until Friday, April 3rd, but you should contact your SBA approved lender ASAP if you are planning to submit an application. If you need help finding a lender, check out this great tool from the SBA.

How to Qualify for a PPP Loan from the SBA Under the CARES Act

If you have under 500 employees and are not a non-profit, not a franchise, and not a religious organization and are having trouble continuing operations in the current environment, the answer is likely “Yes.” As it currently stands, most businesses with under 500 employees will qualify for the coronavirus relief loans.*

With the possibility of complete loan forgiveness, some would call this “free” money, but of course, the SBA has some strings attached in hopes of keeping employees on payroll and small businesses up and running. 

Currently even inside sources with our national SBA lenders do not know exact details of how the CARES Act will be implemented. They don’t have specifics yet because they are waiting on the SBA to release official guidance for granting a Payment Protection Plan Loan. Once released, these guidelines will provide more specifics on eligibility, loan applications, and loan forgiveness. 

Ahead of these guidelines, we have compiled some quick facts for you to reference below to help decide if applying for a PPP Loan makes sense for your company. 

Our sources have hinted that time will be of the essence once applications are open as the SBA is set to loan over 10x its typical annual budget in less than 3 months. This volume means that they will likely be overwhelmed with applications. And despite this volume, some people project that the SBA will not have enough cash to cover a PPP Loan for each business that is eligible. So, we recommend filling out the attached application and getting in contact with an SBA lender as soon as possible should you be interested in the PPP Loan.

Quick Facts on PPP Loan Eligibility for Small Businesses via CARES Act

Significant Dates Regarding PPP Loans

  • SBA Guidance on PPP loans – is now available here.
  • PPP Loan Application Available – It was made available on Tuesday, March 31st and was updated on Friday, April 3rd with the following changes:
    • There is now a box at the beginning of the application where applicants note their organization type.
    • Question 7 has been changed and could be a little tricky.
    • There is a new question 8.
  • Submissions will reportedly start being accepted on Friday, April 3rd, and it’s important to talk to an eligible lender as soon as possible if you’re interested.


  • 100% SBA guarantee
  • No SBA Fees paid by borrower
  • No Personal Guarantee
  • No Collateral Requirement
  • Automatic 6-month deferral of principal and interest payments, up to 12-month deferral available
  • 10-year term for any unforgiven amount
  • 4% max fixed interest rate
  • No credit elsewhere test***

Eligible use of funds (not necessarily in the forgiveness calculation)

  • Payroll
  • Salaries
  • Health Care benefits
  • Rent
  • Utilities
  • Interest on mortgage
  • Interest on other debt
  • Refinance disaster loan

PPP Loan Forgiveness

  • Loan Forgiveness cannot exceed your principal loan amount
  • The amount forgiven will not be taxable income
  • Cutting employees could reduce the amount of forgiveness you receive
  • Reducing wages could reduce the amount of forgiveness you receive

Resources on How to Apply for a Small Business Loan under CARE Act

For other Coronavirus (COVID-19) resources specifically for essential businesses, you can see our list of essential links by clicking here.

*This is not an exhaustive list of application requirements.

**If your current bank is not SBA-preferred, it may be worth exploring other banking options for this particular program. As it stands, SBA-preferred lenders are the only institutions capable of processing PPP loans, but the SBA is considering expanding the network of SBA-preferred financial institutions.

***Typically a requirement of an SBA loan is that a borrower could not get a conventional loan. However, with a PPP loan, this is not a requirement.