Payroll Protection Program FAQ

Yes. With the new round of funding that just passed congress many banks and other authorized SBA lenders have resumed accepted applications. 

PPP loans provide cash-flow assistance through 100% federally guaranteed loans to employers who maintain their payroll during this emergency. Up to 100% of the loan can be forgiven based on employee retention and payroll costs, mortgage/rent expense and utilities over the eight-week period following the loan date.  

PPP loans have a host of attractive features, such as forgiveness of up to 100% of the loan for up to 8 weeks of payroll based on employee retention and salary levels, no SBA fees, a nominal 1% interest rate, and six months of repayment deferral (although interest will accrue during this time)In addition, there are no prepayment penalties or fees, no collateral is required, and there is no personal guarantee requirement. 

All businesses – including nonprofits (limited to 501c3 organizations only), veterans’ organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply. Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries (click HERE for additional detail).  

For this program, the SBA’s affiliation standards are waived for small businesses (1) in the hotel and food services industries (click HERE for NAICS code 72 to confirm); or (2) that are franchises in the SBA’s Franchise Directory (click HERE to check); or (3) that receive financial assistance from small business investment companies licensed by the SBA. Additional guidance may be released as appropriate. 

Affiliated businesses must be considered when determining the size of the business in terms of less than 500 employees. To compute the employee count, you must include the employees of any affiliated businesses, which are those that have common ownership and owners/shareholders who are able to exert influence over business decisions.  

The law was written that proof of economic injury was not required for the PPP.  However, in the latest FAQ (dated 4/29/2020) issued by the SBA, borrowers must certify in good faith that there is economic uncertainty making their loan request necessary. 


The maximum amount of money you can borrow is equal to 2.5 times your average monthly payroll costs or $10 million, whichever is lower. You must exclude from your calculation of average monthly payroll costs any compensation in excess of $100,000 per employee as well as the compensation of any employee who does not live within the United States. You may include employer portion of state and local taxes in the computation. 

These payments are included, including housing and food allowance. 

You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. Payments are on a cash basis on payroll date, not pay period. No more than 25% of the forgiven amount may be for non-payroll costs.  

You will also owe money if you do not maintain your staff and payroll.  

  • Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount. 
  • Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019. 
  • Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.

Union costs are not specified as being included either in calculations of payroll cost to determine the amount of the PPP loan or to determine forgiveness. 

No. Businesses cannot receive multiple loans. 

You will need  

  • TIN 
  • Proof of compensation for the 1 year prior to the loan (940, 941s, W-2s, 1099s, K-1s, payroll journals, etc.) 
  • Payroll reports showing gross wages, paid time off, vacation pay, family medical leave pay, state and local taxes assessed on each employee’s compensation 
  • Documents showing health insurance premiums paid by the company 
  • Documents showing sum of all retirement plan funding that was paid by the company (exclude funding that came from employees’ out of pocket) 

Your employees do not need to be actively working for you to receive the PPP loan, they simply must be on your payroll.

What is the deadline for applying? June 30, 2020.  

During what time period is pre-COVID employee headcount computed? February 15 – April 26, 2020. 

When does the eight-week forgiveness period begin? On the date of your loan.  

When do I have to restore my employee headcount to pre-COVID levels? June 30, 2020 

Yes. To determine compensation for the loan amount calculations, include any compensation payments that are subject to self-employment payroll tax. Owner draws are used in compensation calculations if they are recognized in self-employment compensation and subject to self-employment payroll tax. In computing forgiveness amounts, you will make a similar calculation using the payments that are subject to self-employment payroll tax.  

Here is a good resource for payroll calculations for self-employed individuals.  

PPP loans are to safeguard payroll payments to workers, so your employer may file for a PPP. You may file for PPP on your own; however, if you are still getting income from your employer, you may not qualify for a PPP loan on your own. 

Yes, loans are being withheld if you owe payroll tax for previous years, have liens, or even have a low credit score. The goal of the program is to safeguard the paychecks of workers. 

Miscellaneous FAQ

Unemployment programs and the unemployment rate is administered by each individual state. Please check with your state's DOL. In Georgia, where Woodard is located, here is the answer from the GA DOL COVID-19 Employer FAQs: "The employer filed (partial) claims submitted because of COVID-19 will NOT affect your tax rate. Claims filed by your employees may affect your tax rate." 

States and localities administer the shelter in place advisories or executive orders that have been put in place. Please refer to your state or local government advisories or executive orders. In addition, the Department of Homeland Security provided this Guidance on the Essential Critical Infrastructure Workforce. 

Economic Injury Disaster Loan FAQ

No. According to the SBA’s website on April 16, 2020, the SBA is not currently taking applications:  

SBA is unable to accept new applications at this time for the Economic Injury Disaster Loan (EIDL)-COVID-19 related assistance program (including EIDL Advances) based on available appropriations funding. 

Applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis. 

The Small Business Administration’s EIDL Program began long before the COVID-19 crisis. An EIDL can help you meet necessary financial obligations that your business or private, non-profit organization could have met had the disaster not occurred. It provides relief from economic injury caused directly by the disaster and permits you to maintain a reasonable working capital position during the period affected by the disaster. EIDLs do not replace lost sales or revenue and are not designed for the purchase of equipment or property. 

The Economic Injury Disaster Loan Program (EIDL) can provide up to $2 million of financial assistance (actual loan amounts are based on amount of economic injury) to small businesses or private, non-profit organizations that suffer substantial economic injury as a result of the declared disaster, regardless of whether the applicant sustained physical damage. To be eligible for EIDL assistance, small businesses or private non-profit organizations must have sustained economic injury 

Although the EIDL program for the COVID-19 crisis is designed to end 12/31/2020 unless it is extended past that date, the SBA’s website currently states the following:  

SBA is unable to accept new applications at this time for the Economic Injury Disaster Loan (EIDL)-COVID-19 related assistance program (including EIDL Advances) based on available appropriations funding. 

Applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis. 

The EIDL is available for small businesses with 500 or fewer employees or has more than 500 employees but meets the SBA’s industry size standards for the pandemic. The business must operate primarily in the U.S. or contribute significantly to the U.S. economy through taxes or use of U.S products, materials or labors. It also must be independently owned and operated and not be considered a dominant business in its field nationally. Finally, private non-profit organizations and 501(c)19 veteran organizations are eligible.  

Yes. You must provide proof of economic hardship.  

The EIDL can provide up to $2 million of financial assistance. The actual loan amount is based on amount of economic injury 

The SBA’s Disaster Loan Assistance page provides an online application.  

In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available following a successful application. 

No. Repayment is not required (even if the borrower’s request for a 7(b) loan is denied). 

Yes. This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by COVID-19. 

Whether you’ve already received an EIDL unrelated to COVID-19 or you receive a COVID-19 related EIDL and/or Emergency Grant between January 31, 2020 and June 30, 2020, you may also apply for a PPP loan. If you ultimately receive a PPP loan or refinance an EIDL into a PPP loan, any advance amount received under the Emergency Economic Injury Grant Program would be subtracted from the amount forgiven in the PPP. However, you cannot use your EIDL for the same purpose as your PPP loan. For example, if you use your EIDL to cover payroll for certain workers in April, you cannot use PPP for payroll for those same workers. 

The EIDL is designed to help with operating capital, not to cover lost revenue when rentals are cancelled.  

Paycheck Protection Program Forgiveness FAQ

You will need to apply for forgiveness with the lender who funded your PPP loan.  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 is salaries and wages decrease.  The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:

  • Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
  • Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
  • Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
  • Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30, 2020
  • Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined

You can access the PPP Loan Forgiveness Application & Instructions by clicking here

Originally, under the CARES Act, employers were limited to an 8 week period to spend funds received under the PPP.  The Paycheck Protection Program Forgiveness Flexibility Act, signed in to law on June 5, 2020 extends the period from 8 weeks to 24 weeks.

Under the PPPFA that was signed in to law on June 5, 2020, loan recipients are now only required to spend 60% of their PPP funds on maintaining payroll.  This was dropped from the original 75% under the CARES Act.

Now, under the PPPFA, 40% of the funds can be spent on operating costs like rent and utilities.   

Under the PPPFA, enacted into law on June 5, 2020, PPP loan recipients will now have 5 years at 1% interest to payback any funds not covered under loan forgiveness. 

The PPPFA now gives businesses until December 31st to rehire workers in order for their salaries to count toward forgiveness.  This has been extended from the original deadline under the CARES Act of June 30th. 

The employee salary eligible for loan forgiveness is still capped at $100,000.

If a business owner is unable to rehire an individual who was an employee on or before February 15th, or is able to prove they were unable to hire a similarly qualified candidate, their loan may still be eligible for forgiveness.