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Paycheck Protection Program

Updated 3-31-2020

We understand that many small businesses are struggling to continue to pay employees and cover overhead at this time. One key component of the CARES Act is the Paycheck Protection Program (PPP). This program is designed to provide employers with a potential alternative to a furlough or a layoff of employees due to business interruptions caused by COVID-19.


Applicability: Small businesses, non-profits, veterans organizations, tribal businesses, sole proprietors, independent contractors, and eligible self-employed individuals in operation on February 15, 2020.


Eligibility: Must have less than 500 employees or meet the SBA size standard for your industry. For certain employers in the accommodation and food services sector, the employer may still be eligible if it does not employ more than 500 employees at an individual physical location. Note, the number of employees considers full time and part time employees for eligibility.


Loan amount: The maximum loan amount is the lessor of:

  • 2.5 times your average monthly payroll costs for the 1-year period before the date of the loan. Alternative calculations apply for seasonal business (as determined by the SBA) or entities not in business for the previous 12 months

  • $10,000,000


Allowable uses of loan proceeds: The following are eligible expenses that can be paid with loan proceeds during the covered period February 15, 2020 through June 30, 2020:

  • Payroll costs

    • The Act includes specific provisions and exceptions for what are considered payroll costs – Generally, it includes salaries and wages and tips up to $100,000 in one year as prorated for the covered period

  • Group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums

  • Payments of interest on mortgage obligation (not principal)

  • Rent

  • Utilities

  • Interest on any other debt obligations that were incurred before February 15, 2020


Forgiveness amount: The borrower will be eligible for forgiveness in an amount equal to the following costs incurred during the 8-week period beginning on the date of origination of the loan (not to exceed principal amount):

  • Payroll costs

  • Payments of interest on mortgage obligation (not principal) incurred before February 15, 2020

  • Rent for agreements in force before February 15, 2020

  • Utility expenses - electricity, gas, water, transportation, telephone, or internet for service that began before February 15, 2020


Forgiveness reduction: The amount forgiven may be reduced if the borrower has reduced its number of full time equivalent employees or reduced wages paid to employees by more than 25%. Note, the CARES Act includes provisions that allow the borrower to rehire individuals if the borrower has eliminated the reduction in FTE employees or reduction in salary and wages by June 30, 2020 in order to remain eligible for forgiveness.


Maturity of loans with remaining balance after forgiveness: The Act includes a provision requiring lenders to provide payment deferment of payment of principal, interest, and fees for 6 to 12 months. Any amount not forgiven has a maximum maturity of 10 years and maximum interest rate of 4 percent.


How to apply: You will apply through an authorized local lending institution through June 30, 2020. The SBA is expected to release Note, this is a different application process than the SBA Economic Injury Disaster Loans (which does not include the key forgiveness provisions). 

When to apply: The US Department of the Treasury has released the application forms and has stated that businesses and sole proprietorships can apply starting April 3, 2020 and independent contractors and self-employed individuals can apply starting April 10, 2020. We encourage you to reach out to your current banking relationship to start the application process immediately .

See the application and other relevant information provided by the Treasury here:


In short, your small business is most likely eligible to apply for assistance during this time. We at TJ Advisors are committed to bringing you the most relevant and up to date information in an effort to help your business stay on track during this period of uncertainty. Please note that not all provisions, exceptions, exclusions, and special circumstances are included in order to maintain brevity. Please reach out directly so that we can provide the business support you need in these unprecedented times. We are here for you, contact us today at or 972-629-9164.

Refer to Paycheck Protection Program Interim Final Rule page for additional info on guidance issued by the US Department of the Treasury on 4-2-2020

Refer to Family First Act & CARES Act page for additional COVID-19 Related Payroll Tax Credits

Refer to Paycheck Protection Program - Additional Criteria & Requirements page for additional eligibility criteria & requirements for certain pledges of loans

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