CARES Act Paycheck Protection Program

Additional Guidance Provided for the Paycheck Protection Program

The Small Business Administration (SBA) released additional information on the Paycheck Protection Program (PPP).  Below summarizes the key changes:

  1. Independent Contractors/1099 Recipients– These costs may not be included in “payroll cost” calculations.
  2. Interest Rate – Interest rate will be 1.00%.
  3. Forgiveness Requirements – Applicants must spend a minimum of 75% of loan proceeds on payroll costs during the 8-weeks following disbursement in order to qualify for full forgiveness.
  4. Term – Term of loan will be 2 years.
  5. $100,000 Limits – Any compensation above $100,000 (including salary, benefits, and all other payroll costs as defined in the CARES Act) is excluded from loan amount calculations and loan uses.
  6. First-Come, First-Served – Applications will be processed on a first-come, first-served basis.
  7. Automatic Deferral – Loans will have a 6-month automatic deferral.
  8. You can receive proceeds from both SBA loans – PPP Loans and Economic Injury Disaster Loans (EIDL) can be used for different purposes, but if both used for payroll, then the EIDL must be refinanced with a PPP loan.


  1. U.S. Ownership Requirements – Applicants might now be required to have 51%+ U.S. ownership in order to qualify for a PPP loan based on the drafted SBA lender-side application form.
  2. Affiliation – The new interim regulations state that “SBA intends to promptly issue additional guidance with regard to the applicability of affiliation rules.” This suggests, together with political commentary, possible changes to affiliation rules, allowing for a larger pool of applicants (which could include certain start-ups with controlling investors and certain private equity portfolio companies).

Updated Webinar

Join us on Monday, April 6 at 12:00 PM as we review the recent updates made to the two key provisions surrounding loan programs available for small businesses – the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL).

Topics will include:

  • Most recent updates made to the SBA loan programs
  • An overview and side-by-side comparison of both loan options
  • Loan forgiveness limits and details
  • Best practices for appropriately applying for these loans
  • Outstanding questions and where guidance is needed in the new law

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