Congressman John Carter

Representing the 31st District of Texas

Paycheck Protection Program

SMALL BUSINESS PAYCHECK PROTECTION PROGRAM

The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.

Fully Forgiven

Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Must Keep Employees on the Payroll—or Rehire Quickly

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 if salaries and wages decrease.

All Small Businesses Eligible

Small businesses with 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors— are eligible. Businesses with more than 500 employees are eligible in certain industries.

When to Apply

Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply. We encourage you to apply as quickly as you can because there is a funding cap.

How to Apply

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. All loans will have the same terms regardless of lender or borrower. A list of participating lenders can be found here: sba.gov/paycheckprotection/find/

Loan Amounts 

Loans of up to $10 million can be used to cover payroll, paid sick leave for which you are not receiving a tax credit under the Families First Coronavirus Response Act, insurance premiums, rent, utilities, and mortgage interest payments.

Frequently Asked Questions

What is the Paycheck Protection Program?
The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.

Who is eligible for the Paycheck Protection Program?
You are eligible for a loan if you are a small business that employs 500 employees or fewer, or if your business is in an industry that has an employee-based size standard through SBA that is higher than 500 employees. In addition, if you are a restaurant, hotel, or a business that falls within the North American Industry Classification System (NAICS) code 72, “Accommodation and Food Services,” and each of your locations has 500 employees or fewer, you are eligible. Tribal businesses, 501(c)(19) veteran organizations, and 501(c)(3) nonprofits, including religious organizations, will be eligible for the program. Independently owned franchises with under 500 employees, who are approved by SBA, are also eligible.

Where can I find information about Small Business Administration (SBA) loans and the Paycheck Protection Program?
The Treasury Department has created an overview of the PPP here and continually updates a resource page with important information for small businesses, lenders, and rules related to the program here. The SBA has guidance for small businesses and loan resources available here. Additional information and resources for small businesses from coronavirus.gov can be found here.

When is the application deadline for the Paycheck Protection Program?
Applicants are eligible to apply for the Paycheck Protection Program loan until June 30th, 2020.

Where can I apply for the Paycheck Protection Program?
You can apply for the Paycheck Protection Program (PPP) at any lending institution that is approved to participate in the program through the existing U.S. Small Business Administration (SBA) lending program and additional lenders approved by the Department of Treasury. This could be the bank you already use, or a bank or credit union near you. You do not have to visit any government institution to apply for the program. If your bank is not participating or you are having issues applying, you can find other institutions here: https://www.sba.gov/paycheckprotection/find

I am an independent contractor or gig economy worker, am I eligible?
Yes. Sole proprietors, independent contractors, gig economy workers, and self-employed individuals are all eligible for the Paycheck Protection Program.

Can small businesses hire back previously laid off employees and still have the loans forgiven? If so, what is the hire-back date?
Yes. There is flexibility in the program to allow businesses to hire new, or returning employees, by June 30, 2020, and still qualify under the headcount requirements. 

What is the maximum amount I can borrow?
The amount any small business is eligible to borrow is 250 percent of their average monthly payroll expenses, up to a total of $10 million. This amount is intended to cover 8 weeks of payroll expenses and any additional amounts for making payments toward debt obligations. This 8-week period may be applied to any time frame between February 15, 2020 and June 30, 2020. Seasonal business expenses will be measured using a 12-week period beginning February 15, 2019, or March 1, 2019, whichever the seasonal employer chooses.

How can I use the money to ensure the loan will be forgiven?
The amount that may be forgiven is equal to the total expenses for payroll, and existing interest payments on mortgages, rent payments, leases, and utility service agreements. Payroll costs include employee salaries (up to an annual rate of pay of $100,000), hourly wages and cash tips, paid sick or medical leave, and group health insurance premiums.

When is the loan forgiven?
The loan is forgiven at the end of the 8-week period after you take out the loan. Borrowers will work with lenders to verify covered expenses and the proper amount of forgiveness.

What is the covered period of the loan?
The covered period extends from February 15, 2020 to June 30, 2020. Borrowers can choose which 8 weeks they want to count towards the covered period, which can start as early as February 15, 2020.

How much of my loan will be forgiven?
The purpose of the Paycheck Protection Program is to help you retain your employees, at their current base pay. If you keep all of your employees, the portion of the loan used for payroll and other covered expenses will be forgiven. If you still lay off employees, the forgiveness will be reduced by the percent decrease in the number of employees. If your total payroll expenses on workers making less than $100,000 annually decreases by more than 25 percent, loan forgiveness will be reduced by the same amount. If you have already laid off some employees, you can still be forgiven for the full amount of your payroll cost if you rehire your employees by June 30, 2020.

I'm a small business owner and haven't been able to apply. I'm worried that money will run out before I apply for PPP. 
Congress replenished PPP and Economic Injury Disaster Loans through the Paycheck Protection Program and Health Care Enhancement Act on April 23, 2020. This legislation added an additional $310 billion to PPP and $60 billion for the EIDL program.