SBA’s Paycheck Protection Program for Small Businesses Affected by the Coronavirus Pandemic Launches

One of Multiple Economic Relief Provisions to Protect Workers and Small Businesses

WASHINGTON The U.S. Small Business Administration Administrator Jovita Carranza today launched the Paycheck Protection Program, a $349 billion emergency loan program created last week with the President’s signing of the Coronavirus Aid, Relief, and Economic Security Act (CARES). The program provides forgivable loans up to $10 million to small businesses left financially distressed by the Coronavirus (COVID-19) pandemic. The loans, which will be administered at the local level by a national network of banks and credit unions, are designed to maintain the viability of millions of small businesses struggling to meet payroll and day-to-day operating expenses.


“These loans will bring immediate economic relief and eight weeks of financial certainty to millions of small businesses and their employees,” SBA Administrator Carranza said. “We urge every struggling small business to take advantage of this unprecedented federal resource – their viability is critically important to their employees, their community, and the country.”


The loans, which are 100% backed by SBA, are being provided to small businesses without collateral requirements, personal guarantees, SBA fees, or credit elsewhere tests. Those eligible for the program include small businesses, certain non-profits, veterans’ organizations, self-employed individuals, independent contractors, and other businesses meeting size standards based on their North American Industry Classification System code.


The Paycheck Protection Program’s maximum loan amount is $10 million with a fixed 1% interest rate and maturity of two years.


The loans are available to cover up to eight weeks of average monthly payroll (based on 2019 figures) plus 25% and payments are deferred for six months (interest does accrue). The SBA will forgive the portion of loan proceeds used for payroll costs and other designated operating expenses for up to eight weeks, provided at least 75% of loan proceeds are used for payroll costs. Eligible expenses for the eight-week forgiveness include:

  • Payroll costs (excluding the prorated portion of any compensation above $100,000 per year for any person. Payroll costs include salary, commissions, tips; certain employee benefits including sick leave and health care premiums, and state and local taxes;

  • Mortgage interest (not prepayment or principal payments) and rent payments on mortgages and leases in existence after February 15, 2020;

  • Utilities such as electricity, gas, water, transportation, phone and internet access for services that began before February 15, 2020; and

  • Additional wages paid to tipped employees.

Visit www.SBA.gov/Coronavirus for additional resources about protecting your business, employees and customers.


On April 4, the SBA issued the following additional press briefing regarding the Paycheck Protection Program:


WASHINGTON – SBA Administrator Jovita Carranza today announced that SBA issued guidance clarifying that all faith-based organizations impacted by Coronavirus (COVID-19) are eligible to participate in the Paycheck Protection Program and the Economic Injury Disaster Loan program, without restrictions based on their religious identity or activities, to the extent they meet the eligibility criteria outlined in the CARES Act that was passed by Congress, signed into law by President Trump, and implemented by the Paycheck Protection Act Interim Final Rule.


“Following the passage of the emergency economic relief assistance, the Administration and Congress acted to ensure that small businesses and non-profits alike have access to critical funds to keep their workers paid and employed,” said Carranza. “Faith-based organizations have always provided critical social services for people in need, and SBA will make clear that these organizations may access this emergency capital.”


The Paycheck Protection Program is designed to keep small business workers employed and provide small businesses with capital through the nation’s banks and other lending institutions, with support from the SBA. The Paycheck Protection Program’s maximum loan amount is $10 million with a fixed 1% interest rate and maturity of two years. SBA will forgive the portion of loan proceeds used for payroll costs and other designated operating expenses for up to eight weeks provided at least 75% of loan proceeds are used for payroll costs.

The Economic Injury Disaster Loan program provides qualifying small businesses and non-profits with working capital up to $2 million with low interest rates and terms extending up to 30 years.


“While every American is being affected by COVID-19, the impact of this pandemic is particularly hurting our schools and places of worship, and disproportionately impacting the underrepresented communities, the sick, the elderly and the lower income,” added Carranza. “It’s vitally important that organizations focused on delivering critical social services and meeting community needs remain viable, particularly during this economically challenging time.”

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