To find out all about Coronavirus-related unemployment benefits     

Paycheck Protection Program: All About Financial Assistance For Small Businesses

Updated : August 4th, 2020

The Coronavirus pandemic outbreak has affected the Americans like never before. Many businesses have shut down, and millions of people have lost their employment. To provide Americans with economic assistance, the U.S. Congress has passed the Coronavirus Aid, Relief, and Economic Security (CARES) act. This act offers unemployment benefits to the unemployed in addition to supporting business operations through the Paycheck Protection Program (PPP). 

What Is a Paycheck Protection Program?

The CARES Act includes a $2 trillion stimulus package that provides financial relief. While a portion of the package is given as unemployment benefits, about $349 billion is dedicated to the Paycheck Protection Program. This program provides federally guaranteed loans to businesses to cover their payroll and other costs.

Which Businesses Qualify For The Paycheck Protection Program?

Not all businesses qualify for the Paycheck Protection Program. Only those with 500 employees or fewer are eligible for PPP. This includes independent contractors, sole proprietorships, private non-profits, the self-employed, and 501(c)(19) veterans organizations. For the hospitality and foodservice industries (with a NAICS 72 code), the limit of employees may vary with the location.

Additional Eligibility Requirements

To receive the loan, you must also meet additional requirements. This includes:

  • Your business was in operation on February 2020
  • You have paid the payroll taxes and employed salaries 
  • You have paid your independent contractors

Which Businesses Do Not Qualify for the Paycheck Protection Program?

Though some businesses have 500 or fewer employees, they still do not qualify for the PPP loan. These include:

  • Businesses who lend, invest or speculate (Banks and investment companies)
  • Passive businesses (Landlords)
  • Political and policy lobbyists
  • Multi-level marketers
  • Gambling and marijuana businesses
  • Businesses who promote religion
  • Household employers 

What Can the Loans Be Used For?

You can use the loans for:

  • Payroll purposes including employee benefit costs (like health insurance and retirement contributions)
  • Rent or under lease agreements in force before February 15, 2020
  • Interest on mortgage obligations that incurred before February 15, 2020
  • Utilities for which the service started before February 15, 2020

What Is Counted As Payroll Costs?

Payroll costs include:

  • Wages, salary, tips, or commissions (capped at $100,000 yearly per employee)
  • Compensation to or income for an independent contractor or sole proprietor that is less than $100,000 
  • Employee benefits including parental, medical or sick leave, or costs for vacation, 
  • Allowance for dismissal or separation or dismissal
  • Local or state taxes imposed on employee compensation
  • Retirement benefits

Where Can You Apply For A Loan?

You can apply for a loan through any Small Business Administration (SBA) lender. The SBA collaborates with about 1,800 local lenders to provide loans. 

When applying for a loan, you have to provide a good-faith certification to justify your loan request. You must acknowledge that the loan will be used to maintain payroll and retain your employees. Also, you must certify that you haven’t received any loan under the Paycheck Protection Program or have any loan applications pending. 

Documents Required While Applying For A Loan  

You must submit a copy of the following documents while applying for a loan.

  1. 940, 941 or 944 payroll tax reports or Form W-3 or Schedule C of 2019.
  2. Payroll reports for the 12-months of 2019 that show the gross wages for each employee, including 
  3. Paid time off for each employee
  4. Family medical leave pay for each employee
  5. Vacation pay for each employee
  6. State and local taxes imposed on each employee’s compensation

    Will The Loan Be Forgiven? 

    Yes. Complete or portion of your loan may be forgiven, provided you use it on eligible expenses. When you receive the loan, you have 8 weeks to utilize the loan.

    Note –

    The loan has a 1% interest rate and maturity of 2 years. 

    Neither the federal nor local lender charges any fee during the process.

    How To Request Loan Forgiveness?

    You can request loan forgiveness by applying it to your local lender. Your application should include: 

    • Documents that determine the number of full-time equivalent employees on your payroll 
    • State income, payroll, and unemployment insurance (UI) filings
    • Payroll tax filings reported to the Internal Revenue Service (IRS)
    • Documents that verify payments on covered lease and mortgage obligations 
    • Documents that verify covered utility payments

    The lender can take up to 60 days to decide on your application. If approved, the lender will report the expected forgiveness amount to the SBA. The SBA will forgive the loan within 15days. 

    How Much Amount Can A Business Receive? 

    You can receive a loan that is 2.5 times your average monthly payroll. The amount is capped at $10 million. The loan amount is calculated by considering your average monthly payroll for January and February 2020 for new businesses or the previous year for old businesses. 

    The Paycheck Protection Program is expected to end on June 30, 2020. If you meet the eligibility requirements, then quickly file for a loan and get benefited.  


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    1. I lived in ga in 2019 and move to florida in 2020 and work for the xmas months in nov-dec. I was told to do a combine wage claim. my question is which state do i file the claim in?

    2. I filed for pua in Ohio back in October 2020.My claim has been in ajudacatuon since 11/1/20.So 2 to 6 weeks is a total understatement! When I call.i am told to basically hurry up and wait some more.I have recently been redetermined and my claim is allowed.but I have one pending issue.How long is too long?

      1. Nicole,

        Unfortunately, nobody has an answer. There are perhaps thousands of pending applications. Please consider the option of visiting an office in the vicinity if safe and feasible.

    3. If you claim your weeks for unemployment and for the next 2 months you still have not received your money. Where can you go in volusia county to talk with a live person

    4. On NYS DOL website, my claim is saying current yet the information is for my old claim with 0 days remaining despite receiving 2 weeks of payments on the new claim and I was able to certify last night. I haven’t received anything; no letters or emails.

    5. I was disqualified for UI benefits for not providing an ID and other forms of identification. How do I fix this?

      1. Hi Mike, I’m in NYS and was at the end of my BYE on 3/14, I was still certifying but wasn’t getting paid. I found out I had to file a new claim because my other was exhausted. I’m still waiting on approval. Maybe you have to file a new claim. I hope this helps.

    6. They say 2-6 weeks it’s more accurate to say 2-6 months; and when you call many of them are rude and unwilling to assist!

    7. someone needs to look into Sharon L. Anton gillette, wyo. or dickinson, nd she is a fraud and has done so many fraudulent things and please look into her

      1. Annette,

        Please report it to the Fraud Division of the Unemployment Office in your state. You can report on the website.

    8. I worked part time for thee years here in florida. I’m currently not working. I’m also retired and collects social security.
      My question is
      Am I qualified to file for unemployment ?

      1. Ruby,

        To be eligible, you’re required to have sufficient hours and earnings. Please use the “Benefits Calculator” available on this website.

    9. So adjudication takes 8 to 12 weeks. Oh okay, that explains why I havent received payment since July. That surely helps just like the rest of the information that you give. And by the way. What’s the NEW reason you can’t get through to the Call Center.

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