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CARES Act: Paycheck Protection Program

The CARES Act establishes a new $349 billion Paycheck Protection Program (PPP) to support small business by providing job retention loans to cover eight weeks of payroll and operating expenses to keep workers employed.   A summary of the PPP loan is below.  Please note, the following is informational purposes only and should not replace legal advice.

Highlights of the Paycheck Protection Program (CARES Act):

  • Availability: All businesses, sole proprietorships, self-employed individuals, and independent contractors with 500 or fewer employees
  • Amount: Maximum loan amount up to $10 million
  • Terms: Interest rate of 0.5%, maturity of 2 years, first payment deferred for six months
  • Collateral: No collateral, personal guarantees, borrower or lender fees payable to SBA
  • Loan forgiveness if proceeds are used for payroll costs and other designated business operating expenses in the 8 weeks following the date of loan origination


The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.

Fully Forgiven

Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Must Keep Employees on the Payroll—or Rehire Quickly

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

All Small Businesses Eligible

Small businesses with 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors— are eligible. Businesses with more than 500 employees are eligible in certain industries.

When to Apply

Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply. We encourage you to apply as quickly as you can because there is a funding cap.

How to Apply

A copy of the application is below. You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. All loans will have the same terms regardless of lender or borrower. A list of participating lenders as well as additional information and full terms can be found at

The Paycheck Protection Program is implemented by the Small Business Administration with support from the Department of the Treasury.