Understanding the SBA Paycheck Protection Program (PPP)


Are SBA Paycheck Protection Program (PPP) Funds Still Available?

YES, with new fundings available as of Monday, April 27, 2020! The first "wave" of PPP funding has already been fully exhausted. However, $310 billion of additional funding for the SBA PPP program is now available. Funds are limited and are expected to go EXTREMELY quickly so apply today!

Click Here To Apply*

*Kalamata Capital Group, LLC is not an approved SBA lender but has partnered with an approved lender to provide access to the SBA PPP program. By applying, you acknowledge and agree that Kalamata Capital Group, LLC is referring your application to an approved SBA lender and may receive an agent fee for such referral.

What is the SBA PPP?

The Small Business Administration created the Paycheck Protection Program to help small businesses and sole proprietorships continue to cover their payroll despite global economic decline. The SBA Paycheck Protection Program is a temporary solution to get small businesses employers and employees through the COVID-19 disaster, minimizing layoffs and encouraging normal business operations.

The SBA Paycheck Protection Loans are brand new and unique to this economic crisis, and can be eligible for 100% forgiveness if qualifications for usage and employment numbers are met. Current details about the Paycheck Protection Program and disaster loans are listed for quick reference in this table, with expanded information following.

Eligible businesses

  • Small businesses, tribal businesses, veterans organizations, and nonprofits with fewer than 500 employees
  • Sole proprietors
  • Independent contractors
  • Self-employed individuals

Max borrowing amount

The lesser of:

  • $10 million OR
  • 2.5x average monthly payroll costs

Term lengths

  • 2 years

Interest rates

  • 1%


  • Up to 100%*

Deferred payments

  • 6 months (though interest still accrues)


  • Through Jun 30, 2020 or until appropriations are exhausted


  • Payroll and compensation
  • Insurance premiums and healthcare benefits
  • Mortgage interest costs
  • Rent and utilities
  • Interest on other debt obligations

*Forgiveness may be reduced dependent on reduction of number of employees or reduction in salaries.

Who is eligible?

The Paycheck Protection Program is executed by the Small Business Administration, and therefore targets small businesses, organizations, sole proprietorships, and nonprofits. The main eligibility requirement is that the business or organization has fewer than 500 employees. Sole proprietors, freelancers, veterans organizations, and self-employed individuals can also qualify for the Paycheck Protection Program.

In order to apply, businesses or individuals must demonstrate negative impact on their income due to COVID-19. The business must have been in existence before February 15, 2020, There are no requirements specifying credit scores or collateral for the loans.

Loan borrowing amounts and terms

Small businesses hurting from the coronavirus impacts can apply to receive up to 2.5x their average monthly payroll costs—essentially guaranteeing over two months of payroll to maintain employment. The loans top out at $10 million.

For most businesses, the calculation will be straightforward, but the Small Business Administration will help seasonal and brand new businesses determine their accurate estimates.

Paycheck Protection Loans are for two years and include 1% fixed interest rate. Payments will be deferred for six months following the initiation of the loan.

Paycheck Protection Loan forgiveness

The most significant draw for the Paycheck Protection Program is the opportunity for 100% loan forgiveness. Loan forgiveness is contingent upon the use of funds, number of employees, and employee salaries over the life of the loan. Meeting these directions can qualify borrowers for 100% loan forgiveness, meaning you would not have to pay back the principal of the loan.

Use of funds: funds must be used for payroll, mortgage interest, rent, utilities, payroll tax, or employee benefits

Employment numbers: any reduction in employees will need to be reversed by June 30th, 2020 in order to qualify for 100% loan forgiveness

Employee salaries: Decreasing any below-$100k salaries by 25% or more will disqualify your business for 100% loan forgiveness, unless replaced by June 30th, 2020

Forgiveness will be determined on a case-by-case basis after completing and submitting a loan forgiveness application, which will include a detailed documentation of the use of Paycheck Protection Loan funds.

How can businesses use Paycheck Protection Loans?

Unlike regular loans which are used at your discretion, Paycheck Protection Loans need to be carefully used and documented to qualify for 100% loan forgiveness–the goal of many businesses during this chaotic time. So how exactly can a Paycheck Protection Loan be used?

  • Salaries, commission, wages, tips (up to $100,000/year)
  • Payroll costs
  • Employee benefits: vacation, family/medical/parental/sick leave, insurance premiums, retirement
  • State & local compensation taxes (payroll tax)
  • Sole Proprietors & Independent contractors: income and net earnings (also capped at $100,000/year)
  • Interest on mortgage before February 15, 2020
  • Rent for leases existing before February 15, 2020
  • Utility services that started before February 15, 2020

The Paycheck Protection Loans are designed to keep businesses running and allow employees to keep their jobs during the short-term economic crisis. Paycheck Protection Loans cannot be used for purchasing new property or equipment, inventory, repairs, paying off other loans or financial obligations, or any other expenditures not directly related to payroll and day-to-day operations of your business.


The information shared here shall not be construed as accounting, financial, or legal advice. Kalamata Capital Group, LLC is not a Small Business Administration lender, nor your financial advisor. The information shared includes Kalamata Capital Group, LLC's interpretation of the CARES Act and additional guidance provided by the Treasury and Small Business Administration, and you are encouraged to contact your accountants, financial advisors, and attorneys for accounting, financial, and legal advice.