Employers

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Basic qualifications for employers

You likely qualify for a PPP loan if:

  • You were in business on or before February 15, 2020 (or were a seasonal employer that was dormant or not fully operating as of 2/15/2020 but was in operation for a 12-week period between 2/15/2019 and 2/15/2020)
  • You have fewer than 500 total (full- and part-time) employees
    • For second draw loans: you must have fewer than 300 total (full- and part-time) employees
  • You meet all other PPP eligibility requirements (if you’re unsure, the best way to find out is to start your PPP application)

Can I get the PPP if I have a newly formed business?

Currently the PPP loan program applies only to businesses, independent contractors, sole proprietors, etc. who were in business on or before February 15, 2020.

Can I get the PPP if I don’t have employees?

Yes, as long as you meet the other eligibility requirements. Small businesses, sole proprietors, independent contractors, non-profits, partnerships, self-employed individuals, gig workers, etc. are among the many types of businesses allowed to apply for PPP loans.

Can I get the PPP if I had to make layoffs?

Yes. And as long as employee and compensation levels are maintained during the 8 or 24-week covered period after you receive your PPP loan funds, and spend at least 60% of your funds on payroll and the rest on approved expenses, you can have your PPP loan fully forgiven.

Can I get the PPP if I didn’t use the first draw and still have money?

If you were unable to use your first-draw PPP funding, you may be able to return the funds to the SBA (fully document this process via your lender) and reapply for a first-draw PPP loan. If you are able to use all of your First Draw funds on approved uses, then you may also qualify for a Second Draw Loan.

 

To qualify for a second-draw PPP loan, you must certify that you have spent or will spend all of your first-draw PPP funds on eligible expenses by the time you receive your second-draw PPP funding.

Are small businesses required to have 500 or fewer employees to be eligible for the PPP?

No. Small business concerns can be eligible borrowers even if they have more than 500 employees, as long as they satisfy the existing statutory and regulatory definition of a “small business concern” under section 3 of the Small Business Act, 15 U.S.C. 632. A business can qualify if it meets the SBA employee-based or revenue based size standard corresponding to its primary industry. Go to www.sba.gov/size for the industry size standards.

 

Additionally, a business can qualify for the Paycheck Protection Program as a small business concern if it met both tests in SBA’s “alternative size standard” as of March 27, 2020:

(1) maximum tangible net worth of the business is not more than $15 million; and

(2) the average net income after Federal income taxes (excluding any carry-over losses) of the business for the two full fiscal years before the date of the application is not more than $5 million.

 

A business that qualifies as a small business concern under section 3 of the Small Business Act, 15 U.S.C. 632, may truthfully attest to its eligibility for PPP loans on the Borrower Application Form, unless otherwise ineligible.

Can I get a PPP loan if I shut down my business?

If your business has permanently closed, you are not eligible for a PPP loan. If you temporarily closed your business or temporarily halted operations, you may still qualify.

Can I get the PPP if I recently sold my business?

No. If there was a change in ownership through a purchase of substantially all assets of a business that was in operation on February 15, the business acquiring the assets will be eligible to apply for a PPP loan even if the change in ownership results in the assignment of a new tax ID number and even if the acquiring business was not in operation until after February 15, 2020. If the acquiring business has maintained the operations of the pre-sale business, the acquiring business may rely on the historic payroll costs and headcount of the pre-sale business for the purposes of its PPP application, except where the pre-sale business had applied for and received a PPP loan.