Jump Ahead:

• What will lenders be looking for?
• How much can I borrow?
• Will this loan be forgiven?
• Who can I talk to?

What will lenders be looking for?

Borrowers will need to complete the Paycheck Protection Loan Application (download here) and payroll documentation. Lenders will also ask you for a good faith certification that:

1. The uncertainty of current economic conditions makes the loan request necessary to support ongoing operations
2. The borrower will use the loan proceeds to retain workers and maintain payroll or make mortgage, lease, and utility payments
3. Borrower does not have an application pending for a loan duplicative of the purpose and amounts applied for here
4. From Feb. 15, 2020 to Dec. 31, 2020, the borrower has not received a loan duplicative of the purpose and amounts applied for here (Note: There is an opportunity to fold emergency loans made between Jan. 31, 2020 and the date this loan program becomes available into a new loan)

If you are an independent contractor, sole proprietor, or self-employed individual, lenders will also be looking for certain documents (final requirements will be announced by the government) such as payroll tax filings, Forms 1099-MISC, and income and expenses from the sole proprietorship.
 

How much can I borrow?

Loans can be up to 2.5 x the borrower’s average monthly payroll costs, not to exceed $10 million.
 

How do I calculate my average monthly payroll costs?

Subtract the sum of your EXCLUDED payroll costs from the sum of the INCLUDED payroll costs to find your payroll costs.

sum of INCLUDED payroll costs
(minus)
sum of EXCLUDED payroll costs
(equals)
payroll costs

Included Payroll Cost

For Sole Proprietors, Independent Contractors, and Self-Employed Individuals:

The sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in one year, as pro-rated for the covered period.
 

Excluded Payroll Cost

1. Compensation of an individual employee in excess of an annual salary of $100,000, as prorated for the period February 15, to June 30, 2020
2. Payroll taxes, railroad retirement taxes, and income taxes
3. Any compensation of an employee whose principal place of residence is outside of the United States
4. Qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (Public Law 116– 5 127); or qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act

Will this loan be forgiven?

A borrower is eligible for loan forgiveness equal to the amount the borrower spent on the following items during the 8-week period beginning on the date of the origination of the loan:

• Payroll costs (using the same definition of payroll costs used to determine loan eligibility)
• Interest on the mortgage obligation incurred in the ordinary course of business
• Rent on a leasing agreement
• Payments on utilities (electricity, gas, water, transportation, telephone, or internet)
• For borrowers with tipped employees, additional wages paid to those employees

Who can I talk to?

If you haven’t already, we highly recommend reaching out to your bank first to see if they are able to process your loan application. Don’t hesitate to reach out to us or the SBDC (hotline information below) for any help you need with your application, or for questions in general. We are ready to assist you!