Paycheck Protection Program

The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress on March 27, 2020 included a stimulus program called the Paycheck Protection Program (PPP), designed to help small businesses keep Americans employed during the economic downturn caused by COVID-19.

The Paycheck Protection Program provides 100% federally guaranteed SBA loans to small businesses, with the opportunity for loan forgiveness if the borrower maintains a certain threshold of employees and salaries during the crisis (or restores them afterward). These loans can be used to cover operating expenses including payroll costs, health insurance premiums and paid sick leave, employee wages, payments of interest on mortgage obligation, rent, utilities and interest on any other debt obligations before covered period.

1. Qualifying

In general, businesses with less than 500 employees, that were in businesses as of February 15th, 2020 are eligible. You may also be eligible if you are:

  • operating as a sole proprietor

  • operating as an independent contractor

  • self-employed and regularly carrying out a trade or business

  • a tribal business concern that meets the SBA's size standard

  • a 501(c)(19) Veterans Organization that meets the SBA's size standard

  • a small business that meets the SBA's size standard

  • in the accommodation and food service sector and have less than 500 employees per physical location


There are additional special cases. Please consult a Certified Public Accountant (CPA) for more details.

2. Loan Amounts

Loans can be up to 2.5 times your average monthly payroll cost. In the calculator we will help you calculate your average monthly payroll costs. These costs include salaries, compensation and commissions, state or local taxes assessed on employee compensation, vacation and sick leave, health insurance premiums and retirement benefits.

3. Forgiveness

Borrowers who take out an SBA loan are eligible for 100% loan forgiveness. However, that amount can be reduced if:

  • there is a reduction in the number of employees

  • employee wages are reduced by more than 25%


However, if by June 30, 2020 the borrower restores the number of employees or wages, the loan forgiveness amount will not be reduced.

4. Benefits

Other benefits of the loan include:

  • Non-recourse

  • No personal guarantee for the loan

  • Maximum interest rate of 4%

  • No prepayment penalty

  • Up to 100% loan forgiveness with approval

To determine if you may be eligible and to calculate your maximum potential loan amount and loan forgiveness view our calculator.

Disclaimer: this calculator should only be used to get an estimated amount of forgiveness. Please do not make business decisions without doing your own research. We are not loan professionals and you should consult a CPA.

© 2020 Swenson He, LLC. All rights reserved.