How To Apply For The SBA Payroll Protection Program Loan: Simple Guide

sba loan payroll protection program
How to apply for the Payroll Protection Program

As the US government, Small Business Administration and banks prepare to dole out guaranteed SBA loans to business owners who were impacted by Coronavirus, just how do businesses go about applying for Payroll Protection Program loans?

That is the $349 billion question.

Just hours before the CARES Act’s “Payroll Protection Program” was due to launch, major banks, including JP Morgan, said they were concerned about federal guidance and wouldn’t be ready to accept applications for the SBA loans. Treasury Secretary Steve Mnuchin said things would move forward on April 3 regardless. Business owners, meanwhile, are still searching for answers.

As a small business ourselves, we’re here to answer as many of those questions as we can.

UPDATE: The government recently added $310 billion to the Payroll Protection Program and Fundera is accepting PPP loan applications. You can apply here .


What Is The Payroll Protection Program?

The Payroll Protection Program, or PPP, is an element of the recently-passed CARES Act, which allocates $349 billion to forgivable small business loans. This is designed to get small businesses with 500 employees or less, and indepenent contractors and sole proprietors, money to deal with the devastating impact of Coronavirus.

Specially, these loans, which take the form of fully-backed SBA loans handed out by banks and online lenders, are meant to cover the costs of payroll and other overhead like rent and utilities over about a two and a half month period.

Businesses are being encouraged to keep on their current employees, or re-hire ones who have already been let go, since the government will effectively cover those costs.

This is different from the SBA’s Economic Disaster Relief Loan, or EIDL, which is also available to small businesses. That loan, while it comes with some special terms for those businesses impacted by Coronavirus, is meant to be paid back albeit with very favorable terms. However, by applying, small businesses and independent contractors can receive a $10,000 grant, even if you are not approved for the loan. This $10k does not have to be repaid. We recommend you apply for this as well.

But now, on to the Payroll Protection Program, which will be the most beneficial loan for many businesses with employees.


How To Apply For The SBA Payroll Protection Loan

If you know the particulars of The CARES Act and the Payroll Protection Program and just want to know how to apply, here’s what to do.

The Treasury Department has put out a handy guide, but it doesn’t include specifics about where and how to get the loan.

Banks that will participate in the Payroll Protection Program include lenders approved by the SBA, for which you can find a full list here. Banks which are FDIC insured are also being encouraged to hand out these loans. And online business lenders like Kabbage , Fundera , and Live Oak Bank say they, too, are working to accept applications for the Payroll Protection Program.

Online Lenders Offering an SBA Backed Payroll Protection Loan

Since the government is encouraging people to sign up for these loans online due to social distancing, online lenders may be better equipped to handle the process.

Online lending partners who say they will accept PPP loans [check back for updates]:

  • Kabbage — you can apply now with them, but they list a 3-5 day response time and had some glitches in uploading documents with call centers overloaded… though this is an official application
  • Fundera — you can sign up to begin the application process and they will submit your app to a SBA-backed bank that has to capacity to handle the loan
  • Boefly— a little known bank backed by ConnectOne Bank in New York, which was one of the first to issue a PPP loan last Friday, is now accepting applications and has been very communicative throughout the process.
  • Kapitus — a lesser known lender, Kapitus has tons of updated information regarding the PPP and says it is working with banks to fund these loans
  • Live Oak Bank— looks like this is only available to current Live Oak customers

When you visit any of these sites, make sure to look for “Payroll Protection Program” guidance, as they also dole other forms of SBA loans. Those might be good options for you, too, but the Payroll Protection is what you want right now.


SBA Approved Lenders

Local SBA lenders will also accept applications. But their processes will be more disparate and will vary greatly among each bank. Click here for a full list of local SBA lenders in your state.


Banks Who Will Give Out a Payroll Protection Loan

All of the big banks say they, too, will accept applications for Payroll Protection Loans.

That includes JP Morgan, which said they wouldn’t be ready to accept applications on Friday.

Chase Bank has some guidance, but not application yet. Here’s the messaging they have on their website:

“We are making essential updates to improve the Paycheck Protection Program application experience.”

Bank of America has their application online, however it is only open to current Bank ofAmerica customers who have either a business checking, loan or credit card account with them.

Wells Fargo is now accepting a signup form from business customers. This is not the full application for the Payroll Protection Program. Wells Fargo says it will contact customers who fill out the form within few days. Previously, Wells Fargo had said they would only dole out $10 billion worth of loans due hitting to their regulatory asset cap, which limits the amount of loans they can give out relative to their reserves, but the Federal Reserve lifted this restriction.


Application Requirements

The SBA put out guidelines and a sample application earlier this week, but this is not the application banks and online lenders will use. Rather, each bank will offer its own application– these are believed to be short and similar to what the SBA put out.

General Information

In general, you’ll have to provide basic business information, including your EIN (or SSN for sole proprietors and self-employed individuals), address, and contact information.

“Payroll Costs”

Most specifically, you’ll be asked to provide your average monthly “payroll costs” over the course of the last 12 months, likely as of January 31, 2020. You can then multiply that number by 2.5. You will be eligible for a loan at this amount up to $10 million.

There is much debate over how to define “payroll costs” for the purpose of this loan. Included is employee salary, wages and tips, along with benefits and state and local taxes on those wages.

It does not include payments to 1099 independent contractors who would otherwise be employees. This was updated in the Treasury’s most recent guidance.

However, individuals can begin to apply for those benefits as independent contractors and self-employed on April 10. This is meant to cover their expected income during the two-month period.


You’ll also be asked to assert that you haven’t received other loans for a similar purpose, had your business disrupted by Coronavirus, and some other disqualifying items.


SBA Payroll Protection Program Loan Foregiveness

So now you got (or at least applied for) the loan.

How do you get the loan forgiven?

The bill states that as long as the funds are used to cover “payroll costs,” rent, mortgage and utilities, and you keep on the same number of employees (or more) through June 30, you can apply to have the loan forgiven. The government will pay the banks for the full amount of the loan.

It remains unclear what the exact process to apply for loan forgiveness. But the guidelines are clear– as long as you keep your employees on the payroll, or re-hire the ones you let go, and use the funds to pay their salaries, rent, or utilities, you can have the loan forgiven.

The portion of the loan that is not forgiven comes with 1% interest and must be repaid within two years.

There is no personal guarantee for the loan and other usual SBA restrictions are being waived for this purpose.



What can I use the loan for?

The SBA's Payroll Protection loan can be used to pay for employee salary, wages, commissions and tips, benefits, state and local taxes on compensation, and rent, utilities and other overhead.

What is the maximum amount of the PPP loan?

The Payroll Protection Program loan is capped at $10 million.

How much salary is covered?

Employee salaries are covered up to the prorated portion of $100,000.

I'm an independent contractor, can I apply?

Yes, the SBA is extending this loan offer to independent contractors and self-employed individuals to cover essentially their own salary during this period.

When can I apply?

Small businesses and sole proprietors can begin applying for the Payroll Protection Program on April 3, 2020. Sole proprietors and independent contractors can begin applying for the Payroll Protection Program on April 10, 2020.

What is the deadline to apply for the PPP loan?

You can apply for the loan up until June 30, 2020.


Keep checking this page for updates once loan applications go live.

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47 Responses

  1. Hello, I already apply for the disaster loan assistance, how many loan can I apply? Can I also apply for the payroll protection program for sole proprietor s and independent contractors?

    1. Yes, you can apply for both the EIDL and Payroll Protection Program. The Treasury added this in their guidance yesterday.

  2. Wow! Thank you for the next-level breakdown, Kyle. Lots a useful info here. Appreciated!!

  3. I am self-employed I use my car to make deliveries to the dental industry I pay a payroll company $28.50 per paycheck the name of the company is s c i I am the only employee I also have a federal tax ID number for tax purposes obviously do I still apply if yes which part do I qualify for I do not have a website

    1. If you are classified as a sole proprietor, you can begin applying today. If you claim “self-employment” income, then likely next week. Narrow distinction– my guess is you would fall under April 10. You can apply for the prorated portion of what you brought in from this activity over the last 12 months x 2.5. So, for example, if you brought in $1,200 over 12 months, the prorated monthly portion would be $100. You can multiply this by 2.5. So $250. This scales to whatever amount obviously.

  4. It’s been said that the money allotted for PPP will not be enough for all. Can independent contractors apply today to guarantee a slot & if so where?? All the banks I’ve contacted have no access to info, no online applications, & the phone lines are busy for hours. I’ve printed the application, but SBA doesn’t tell you where to email it to or how to get it to a bank. Wondering how they announce that over 700 applications have been accepted??
    Very confusing & frustrating process. Any input would be appreciated greatly!!

    1. Yeah it sounds like you will have to wait. However, the Treasury said they will seek more funding if the total amount is already allocated. It sounds like the only way to get an official application in right now is to be a customer of one of the few banks that have the applications. The resources in the post are good options, and we will update as we find more that are accepting sign ups or applications.

    1. I don’t believe so. You would employment for just the self-employment version (April 10) and not for the business portion which is already available.

  5. I have one partner that won’t sign unless I give them each employees, name, salary, benefit package etc. the 25% partner is all new management than the group that I made my agreement with 20 years ago. They are now a direct competitor and I think they want to steal my employees. I own 75% is there some way to prevent them from black mailing me by refusing to sign?

  6. Thank you! This is a very useful video! So I send any documentation with the initial two page application or wait until the lender asks me for those payroll & other documents, like the 2019 941, payroll summary, etc.
    thank you!

  7. How much loan of can you get on PPL ?? Sounds only monthly payroll times 2.5…so how they expecting us to pay for rent and other expenses??

    1. You can request amount for rent and utilities, but this seems to be scaled back since original language of bill and some banks are only including those payroll costs in their information.

  8. I live in western Kentucky. Where can I find a list of local banks participating as a lender in the Payroll Protection Program? Thank you.

  9. Interested in Gig workers benefits:
    1.) Last two months Jan & Feb worked
    2.) Vehicle Loan & Insurance, used for job 99% exclusively

    1. I’d apply for both the EIDL grant and then the self-employment portion of the PPP which goes live on April 10

  10. Thanks the great clear info. The US Bank in Baker City, Oregon is a SBA lender and they are on it.

  11. Hi my name is Larry I’m a small business owner I have to pay off my mortgage I have to pay my other bills I have to pay all my workers what kind of loan do I apply for is it one loan or two separate ones please let me know I need about 150,000 just to stay on the floa And I work so hard to get this business started and going and keep it up now with this going on I can lose it within a couple months so if you could help me and let me how wow I can go about it please do thank you and have a great day and be safe out there

    1. I’d apply for the EIDL loan with grant (that loan can be used for overhead) along with the Payroll Protection Program to cover employees.

  12. Hello there, my name is Bruce and I’ve been trying to start my own business in my hometown so I can spend more time with my family. My family and religion are the most important things in my life, my wife and I just had our first child and we are absolutely grateful for everything we have. That being said I would love to show my son how hard work pays off, I’ve been working around steel my whole life and put in countless hours to provide for my family, if granted the loan of 300,000 I will be honored and blessed to show how important local small businesses are, thank you and god bless

  13. Hello, thanks for the great info. Is it ok to fill out as many pre apps as possible hoping one will get excepted for process or will that cause a problem? Thanks again.

    1. The links to these online lenders are “pre-apps” at this point, so as long as it’s not a full application, yes, you should fill out as many as you can. If you find a bank to do it directly, you’ll know (or can ask) that it’s the official application. Basically, try as many places as you can.

  14. I was just told by my banker that I couldn’t apply for both PPP and SBA Disaster loan and they would only be covering payroll not rent or utilities. I am being told so much and not sure who to believe. We are a business that has been in business since 2006. I am frustrated and can’t get a straight answer from anyone. I am on hold with SBA and I am 1,461 in line.

    1. The PPP is only payroll. The disaster loan is more flexible because it does have to be repaid…

  15. We have our Business account with Fidelity and they are not doing the Payroll Protection Plan. We tried to go through a local bank and they will not do it because we only have a personal account with them. Any suggestions?

    1. I’d try one of the online lenders– they are accepting pre-apps and working to find bank partners. It’s a state priority for them, especially Kabbage.

  16. Think I made an error with the average payroll amount and loan amount on my application. How would I correct this? Should I submit another application? Is there a way to revise my application?

  17. 1. If you are a DBA, how do you calculate your personal “payroll”. Is that an option here?
    2. Can you include your liability/other business insurance under this?

  18. For my business, I use two different bank accounts, in two different banks. I have applied for a PPP at both banks. I did this because I wanted to have more chance got obtain teh PPP since everyone says it will not be available for everyone…and tether wont be enough money. What if both approve my application? I want to be able to decline of them if that happens. Because I know I CANNOT have two times the same loan, that would be FRAUD.
    Until this day, I only had to do Personal loan. My understanding, when it is about PERSONAL LENDING, is that if a lender has approved my application for a loan, then I AM NOT required to take it. If I want to buy a House, I would go to 2 or 3 different banks, see which one is the more pro active, efficient, and which bank I like the most (customer service etc). Then lets say 2 of them approve my application, I would have the right to move forward and accept it or to decline it. That said I could decline one them and accept the other one.
    I though I could do the same with the PPP which is not a personal but a business loan. Do you think, if more than one bank approve me, that I could decline it? so I can only, and n good faith accept ONE loan. Once again, I dont want ppl to think I will do something fraudulent. cause its not the point.

  19. Kyle, This is a question, not a comment. It is an abvious question that nobody seems to answer. For the PPP loan you apply for a 2-month payroll loan, and 25% of that for other expenses such as rent, utilities, vendor fees etc. In our case however employees are principals, and we haven’t taken out payroll for a while… but we still need help with the other expenses which are much higher now due to the requirement to work from home… BUT: 25% of zero is zero, so are we asking for a zero PPP loan then? How does this work? Does this mean we can’t apply for the PPP loan? Thanks1 emz

  20. As an independent contractor who has been paid and gets straight commission, can I apply without having a business checking account? That’s what I keep hearing from people who are looking at the website?

  21. I was told by Wells Fargo to apply on line. But their site is down and the comments on the website say they are no longer taking applications. How cn I apply at nother bank if we do not bank with them

  22. I applied for PPP thru Kabbage and when they asked for a copy of IRS Form W-3, I knew we’d made an error! My wife & I run a small resale furniture business and I file taxes as “Sole Proprietorship” since it’s simpliest. My loan in currrently “under review,” pending submission of a W-3 which I don’t have. And I can’t find anywhere on the Kabbage site how to correct the error on the application. Phones are totally jammed up, to be expected; can you help? T-Y!

  23. You guys grant ppp loans to employers but how do employee come to know
    How much and when the loan was granted to employer because they never disclose to their staff so there should be some system to inform their
    Employees pls reply

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