SBDC Questions and Answers


FAQ on the Paycheck Protection Program Loans

Deadlines: Lenders can start accepting applications from small business owners and sole proprietors on Friday, April 3, 2020, and from independent contractors and self-employed individuals on April 10. The application deadline is June 30, 2020, but we urge businesses to apply asap since the program is currently capped at $349 billion

Please also download this fact sheet from the U.S. Senate Committee on Small Business & Entrepreneurship answering questions like:

  • Where can I apply for the Paycheck Protection Program?
  • Who is eligible for the loan?
  • I am an independent contractor or gig economy worker, am I eligible?
  • What is the maximum amount I can borrow? What is the covered period of the loan?
  • How can I use the money such that the loan will be forgiven? When is the loan forgiven? Am I responsible for interest on the forgiven loan amount?
  • What are the interest rate and terms for the loan amount that is not forgiven?
  • When is the application deadline for the Paycheck Protection Program?

If the PPP Loan is forgiveable as long as I keep employees on payroll. What does that mean?

Payroll, mortgage interest, rent and utilities covered by a PPP loan will be forgiven, as long as (a) 75% of that comprises payroll, and (b) the full-time headcount and payroll stay the same as they were on average between February 15, 2019 and June 30,2019 (or January 1, 2020 to February 15, 2020 if you launched your business just this year). Businesses that have already let employees go or cut salaries have until June 30, 2020 to rehire or reinstate salaries.

Can you apply for both federal COVID-19 loan programs: Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP)?

  • You may apply to both programs but you may not not take out an Economic Injury Disaster Loan (EIDL) and a Paycheck Protection Program (PPP) for the same purposes.
  • If you took advantage of an emergency EIDL advance of up to $10,000 for payroll protection, that amount would be subtracted from the amount forgiven under PPP.
  • If you received a COVID-19 related EIDL between January 31, 2020 and the date at which your PPP loan becomes available, you would be able to refinance the EIDL into the PPP for loan forgiveness purposes.

Sources: Norcal SBDC EIDL v PPP comparison & US Chamber of Commerce Fact Sheet