New Rules and 8 Tips for Getting PPP Loan Forgiveness

Alex F. says:

Hello, Laura! I love your podcast, tips, and many helpful episodes over the years. I would love to learn more about documenting my payroll for the Paycheck Protection Program.

Thanks for your kind words and question, Alex. I’m glad to know that you’re a long-time listener and that you were able to take advantage of the Paycheck Protection Program (PPP) economic stimulus that the US government created for small businesses.

The best part about getting a PPP loan is that you can have some or all of it forgiven. In other words, if you follow some rules, you can turn a PPP loan into a grant that doesn’t have to be repaid.

If you follow some rules, you can turn a PPP loan into a grant that doesn’t have to be repaid.

Today, I'll explain how to get a PPP loan, what’s required for forgiveness, tips for documenting your expenses, and how to apply for loan forgiveness. Keeping as much of your PPP funds as possible saves money and keeps your business operating despite the coronavirus challenges.

Here's what small business owners need to know about getting a PPP loan and qualifying for forgiveness.

What is the Paycheck Protection Program?

The PPP is part of the $2 trillion CARES Act. It began in early April 2020 to provide financial relief to small businesses hurt by the pandemic. Participating lenders coordinate with the Small Business Administration (SBA) to offer forgivable loans to business owners who want to continue paying their employees (including themselves) during the COVID-19 crisis.

The first round of PPP stimulus paid out $349 billion in less than two weeks. At the end of April, Congress approved an additional $310 billion for the program. There are still funds in the program to date, and you can apply through June 30, 2020. 

How to get a PPP loan

PPP funds are generally available for small businesses with 500 or fewer employees (including those who are self-employed with no employees) that experience financial hardship due to the COVID-19 crisis. You can be a sole proprietor and work for yourself part- or full-time. Businesses in specific industries (such as food service and hotels) with more than 500 employees, may also qualify.

Eligible self-employed individuals and businesses must have been in operation on February 15, 2020. Other factors determine eligibility, but these are the primary requirements.

You apply for PPP through existing SBA lenders or institutions that enroll and are approved by the SBA to participate in the program. They include banks, credit unions, and online lenders. You don’t have to put up any collateral, make personal guarantees, or pay any lending...

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