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" The government has recently passed a bill aimed to support small business at this troublesome time. An important part of this bill is “Paycheck Protection Program”. Below is an easy summary of what you should know. "
What actually is this Paycheck Protection Program?
A 100 percent federally guaranteed loans program called “Paycheck Protection Program” is a part of Coronavirus Aid, Relief, and Economic Security (CARES) Act. This is approximately $350 billion program. The purpose is to provide small business with eight weeks of cash flows.
You can read this bill in detail on this link. https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.pdf
Program highlights
  • This loan can be forgiven and ends up with a non-taxable grant.
  • The loan available could be utilized to cover specified expenses, included but not limited:
    • Payroll expenses
    • Rent expenses
    • Mortgage expenses
    • Utility expenses.
Who can qualify for this program?
Almost everyone! This program is broader than SBA Economic Injury Disaster Loan (EIDL). It is available for independent contractors, small businesses including sole proprietorships and self-employed.
Do you want to know what documents to be submitted?
If you want us to prepare a financial statement for you to include in loan application or just figure out what documents to submit, speak with one of our loan experts at 214-315-6392 or email us at mail@sginccpa.com (Attn: PPP Program)
How does this differ from the SBA’s EIDL?
  • Business or personal collateral is not required. The SBA EIDL may ask you a collateral for the loan amounts over $25,000.
  • PPP is available even if you have access to credit somewhere else. You do not qualify for SBA’s EIDL if you have other source of credit.
  • PPP covers limited type of expenses (details below). The SBA EIDL can cover almost all operating expenses.
  • PPP loan can be forgiven / turn into a grant subject to the terms. The SBA EIDL cannot be forgiven.
What are the similarities between PPP and EIDL?
  • Both of them are low-interest loans
  • To secure either of them, you need to demonstrate that business for economically affected due to COVID-19
  • Both of the loans are provided on long-term basis.
  • There are no penalties on prepayments
  • Both of them has an option of deferring period subject to lender’s approval.
Where can a business use the loan funds for?
The funds are provided to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments. The funds used for other than expenses given below will not be eligible for forgiveness:
  • Payroll including tips and commission payments
  • Group health care benefits/insurance premiums;
  • Mortgage, rent, and lease payments
  • Utilities
  • Interest on any other debt obligations that were incurred before the covered period.
How much funding will be provided under PPP?
The loan amount will be a calculated as per below formula:
Monthly average cost of past twelve months of your business’s qualified payroll expenses multiply by 2.5 times.
This amount will not exceed $10 million. Also note that if you will receive a loan under PPP, you may lose your eligibility for EIDL SBA loan to cover payroll expenses.
How to get the loan forgiven?
After being given the PPP Loan, all qualified expenses for 8 weeks paid for by the PPP loan shall be forgiven
What documents need to be provided to apply loan forgiveness?
The lender must make a decision within 60 days of your forgiveness application submission. If you need detail on what documents need to be submitted while apply for loan forgiveness, please call us at 214-315-6392 or email at mail@sginccpa.com


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