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I will continue to update the Guide that covers the PPP as information changes. If you want to stay up to date — get the guide.

Updated 4-4-2020

What you need to know about the Paycheck Protection Program.

First. If you are considering a Paycheck Protection Program SBA Loan this is the information you need now. If your bank does not yet have an application live for you you can use the SBA Application to gather the necessary information and read the fine print. If your business bank is accepting applications I will break down the information you need on hand to apply…then go do that….today!

What is the program for?

To allow businesses to maintain employees on payroll and continue to cover expenses such as mortgage interest, rent, utilities and of course payroll and employee benefits.  

How long does this program run?

You can apply through June 30, 2020, or ‘until funds made available for this purpose are exhausted’ – SBA interim final rule.  Currently, there are 349 Billion set aside for the PPP program. If you need these funds apply early, and honestly.

Who can apply?

Businesses with under 500 employees, though there are some exceptions if you are a restaurant and have under 500 employees at a particular location and a few other exceptions…if that could be your business go call your attorney and parse this out. My information is directed at small businesses, the self-employed, contractors and online-business owners.

  • Businesses with under 500 employees who are US-based employees. (S-Corps, C-Corps and LLC’s as well as 501(c)(3)’s)
  • Sole Proprietors, Independent Contractors, Self-Employed (though some banks are requiring these individuals to wait to apply until 4/10).
    • You must submit documentation to establish eligibility ie. payroll processor records, payroll tax filings, 1099s or income and expenses from a sole proprietorship.
      • IF you do not have that the lender may use bank records to demonstrate the qualifying payroll amount.

NOTE you must have been in legit business operation as of 2-15-2020 and had employees who you paid salaries and payroll taxes for OR paid independent contractors, as reported on a form 1099.

Can you apply for more than one PPP Loan?

No. Each eligible borrower may only apply for one loan. This is part of the rule from the SBA and is not broken down in the CARES Act.

Are any businesses not eligible?


  1. activity considered illegal under federal, state or local law. So legally operating marijuana dispensaries, are still illegal under federal law, gambling, sex work and the like.
  2. If you are a household that employees household help (nannies, housekeepers and the like).
  3. Businesses who have defaulted on SBA loans in the last 7 years
  4. If an owner of 20% of the business or more is incarcerated, on probation has been convicted of a felony and a few other provisions.

What circumstances qualify?

If your business isn’t struggling just yet what does that mean? You are required to verify that “the current economic uncertainty makes this lan request necessary to support the ongoing operations of the applicant.” SBA Application 

Is this a loan or a grant or what?

This is a loan program. The current fixed rate of the loan is 1%…however, funds used for the intended purposes “documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities, and not more than 25% of the forgiven amount may be used for non-payroll costs”, any amounts falling outside that are a loan which a 2-year repayment at 1%.

What amount of this loan can be forgiven?

Up to 100% of the loan plus incurred interest so long as the forgiveness provisions are met. Including not reducing employee compensation levels, not using more than 25% of the loan for non-payroll expenses.

How do I apply?

Through your business bank, if your business bank is not an authorized SBA lender there are some loan aggregation services facilitating this loan. You do not apply through

How much money can my business get?

The loan amount is the lesser of either the average monthly payroll costs for the previous 12 months multiplied by 2.5 or 10 million. There is a 10 million cap per business.

The SBA recommends the following

  1. Aggregate all payroll costs
    1. PAYROLL IS – compensation for US employees in the form of salary, wages, commissions, cash tips, etc, benefits including vacation, parental, family, medical or sick leave, employee benefits consisting of health care, insurance premiums and retirement compensation, and payment of state and local taxes assessed on employee compensation
    2. FOR INDEPENDENT CONTRACTORS, SOLE PROPRIETORS AND INDEPENDENT CONTRACTORS PAYROLL IS: wage earnings, commissions, income or net earnings from self-employment. 
    3. What is excluded from payroll costs
      1. Employees outside of the US
      2. Compensation to any one employee over 100K a year
      3. Sick & Family leave which is credited under FFCRA (see my guide to FFCRA for info on that)
  2. Subtract any compensation to a single employee in excess of 100K a year
  3. Calculate the average monthly costs (divide the above amount by 12)
  4. Multiply the average monthly costs by 2.5
  5. Add any outstanding amount from an EIDL loan made between January 31, 2020, and April 3, 2020, less the amount of any ‘advance’ under the EIDL COVID-19 loan (Generally 10K)

Can you apply for more than one PPP loan?

The SBA states that only no eligible borrower may receive more than one PPP loan.

Can I use the PPP to pay Independent Contractors?

NO- Independent contractors have the ability to apply for a PPP loan on their own, therefore they do not count to be paid by a business under the PPP loan. 

When do I have to pay this back? 

There should not be payments required for the first 6 months, but during that time interest will accrue. Then it is a 2-year loan. 

How are they determining who gets loans and when?

The funds are first come, first served until they run out…may the odds be ever in your favor on this one.

How does this work with Economic Injury Disaster Loans (EIDL)?

If you are using an EIDL loan to cover payroll it will need to be refinanced into a PPP loan and the application will ask about that. If you received a $10K advance through EIDL you do not need to refinance it and it will not be counted against your PPP loan. 

What is the deal with this 10K advance?

Under the EIDL loan business can request a 10K advance that may be used for

  1. Payroll costs
  2. Making rent or mortgage payments
  3. Repaying obligations that cannot be met as a result of losses in revenue
  4. Meeting increased costs to obtain materials

This is applied for through


Emily D. Baker, Esq.

Emily D. Baker, Esq.

Badass Lawyer for Online Business

Emily has been running business for 15 years and has ove 13 years of legal experience. She spent 10 years at the Los Angeles County District attorney's office where she truly learned to be a solopreneur. Emily has built her consulting and speaking business from the ground up, in her garage jamming out to 90's music. She specializes in no BS practical advice for the starting and scaling online entreprenur. Emily will tell you what the business gurus can't in a way that is both hillarious and empowering.

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