Paycheck Protection Program

Federal Agency: U.S. Small Business Administration

Description: The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

Eligible applicants: This program is for any small business with less than 500 employees including:

  • Sole proprietorships
  • Independent contractors
  • Self-employed persons
  • Private non-profit organization
  • 501(c)(19) veterans organizations affected by COVID-19

Additionally, other eligible applicants may include:

  • Businesses in certain industries that have more than 500 employees so long as they meet the SBA’s size standards for those industries; and
  • Small businesses in the hospitality and food industry with more than one location so long as their individual locations employ less than 500 workers.

Eligible activities:

The proceeds from the loan can be used for:

  • Payroll costs, including benefits*
  • Interest on mortgage obligations, incurred before February 15, 2020
  • Rent, under lease agreements in place before February 15, 2020
  • Utilities, for which service began before February 15, 2020

*Payroll costs include:

  • Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
  • Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits, including insurance premiums; and payment of any retirement benefits;
  • State and local taxes assessed on compensation; and
  • For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.

Award ceiling (MAX): $10 million*

*Loans can be up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. That amount is subject to a $10 million cap.

Award floor (MIN): N/A

Funding Availability: $349 billion*

*This program was created in the CARES Act as an emergency loan program to assist small businesses affected by the COVID-19 public health crisis. This program was not appropriated annual funding in prior fiscal years.

Application cycle: April 3 – June 30, 2020*

*Lenders began processing loan applications for small businesses and sole proprietorships on April 3, 2020. Beginning April 10, 2020, SBA lenders can begin processing loan applications for independent contractors and self-employed individuals.

Special considerations:

  • SBA has waived the credit elsewhere requirement for this program so you will not need to try to obtain some or all loan funds from other sources before applying.
  • To apply, you will need to provide your lender with payroll documentation as well as verification of payments on eligible mortgage, lease, and utility obligations.
  • Under this program, you can only take out one loan.
  • You do not need to pledge collateral for this loan and there is no personal guarantee requirement.
  • No more than 25% of the forgivable loan can be used to cover non-payroll costs.
  • You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities beyond the 8 weeks after receiving the loan.
    • You will also owe money if you do not maintain your staff and payroll.
  • This loan has a maturity of 2 years and a fixed interest rate of 1.00%.
  • Faith-based organizations, including houses of workshop, are eligible to receive loans under the Paycheck Protection Program and all other SBA loan programs regardless of whether they provide secular social services.

More information:

Who can tell me more?

Contact your lender or the SBA District Office nearest you for guidance related to your specific needs.

To apply:

  • Use this form to apply for thePaycheck Protection Program with an SBA lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating in the program.
  • Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. For lenders not currently approved to participate in the program, complete this form and submit to
  • Visit HERE for a list of SBA lenders near you.