The Ultimate Guide to the Payment Protection Program (PPP)

If you’re an entrepreneur or a small business owner, you may have heard about the Payment Protection Program(PPP). If you haven’t or aren’t clear about it, the PPP is a loan program that is open to business owners or entrepreneurs who need help keeping their staff employed. It’s was started as part of the CARES Act which was enacted into law March 27, 2020 and is administered by the US Small Business Association (SBA).


Who Qualifies for the PPP?

You qualify for the PPP if you satisfy the following:

  • Have a business that has been in operation since February 15, 2020

  • Have between 500-0 employees for a first-time loan

  • Have between 300-0 employees for a second-time loan


There are other things you have to look out for based on whether or not this is your first or second time accessing the loan, but we’ll get into that later.


According to the SBA, they’re offering PPP loans exclusively to businesses with 20 or fewer employees and sole proprietors only from Wednesday, February 24 through Wednesday, March 10, 2021.


However, everyone else has March 31, 2021, to apply and get approved for the forgivable loan program.


This is not a program for publicly traded organizations or corporations and so if you are applying on behalf of a company like that, you won’t get approved. There are other conditions on the forms which include being delinquent on other SBA loans.





How to Access the PPP Loan

Loan applications may seem daunting but they’re really not that scary and are easy to do.


  1. Find a lender

In order to get the money, you’ll have to submit through approved lenders. Lenders can be small community banks, credit unions, and other financial institutions. The SBA provides a loan lender matcher to help you find a loan in your community. It’s important to note here that this isn’t guaranteed, they’re just finding lenders you can submit your application to.


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  1. Fill out the form

The form you have to fill out depends on whether or not you’re a first-time borrower or second-time borrower.


First Time Borrowers


If it’s the first time that you’re applying for the loan, you’ll need to fill out this form. That is SBA form 2483. For this form, you’ll need to enter things such as your Business TIN, address, number of employees as well as answering some other questions. If you’d like a walk-through of the form you can watch this video for First Draw PPP Borrowers




Second Draw PPP Borrowers

If you’re a second-time borrower, meaning you’ve accessed the loan before, you’ll need to fill out a different form called 2483-SD. The form is pretty similar in terms of information needed. If you need someone to hold your hand while filling out this form, you can watch this video for Second Draw PPP Borrowers.





In order to get the second draw, you’ll have to have received the first draw and have already gotten forgiveness for the first loan or applied for it.



Do I Qualify for PPP Loan Forgiveness?

You can have this loan forgiven. That means you can have the full amount you’ve been lent totally forgiven. In order to qualify, there are certain conditions you have to meet. For example, you have to make sure the 60% of the loan was put towards payroll and 40% go towards related expenses. The 40% can go to a mortgage, rent, personal protective equipment (PPE), etc. In addition to that, if you’re looking for forgiveness from your first-time loan, your employee and compensation levels would have to be maintained. If you’re seeking forgiveness for the second loan, you’ll have to make sure your employee and compensation levels are maintained in the same way required for the first loan.


According to the SBA, these are the steps to apply for PPP loan forgiveness:

  1. Contact the lender and fill out the appropriate form.

  2. Compile your payroll and non-payroll-related documents. That includes but isn’t limited to payroll statements, tax forms, business mortgage interest payments, payment receipts, and other documents the lender may ask for.

  3. Use the funds within 8-24 week period

  4. Submit the PPP forgiveness application and required documents to your lender.

  5. Follow up with your lender.



You can find out more about PPP loan forgiveness by watching this video.