Applying for a Paycheck Protection Program Loan

The Paycheck Protection Program (PPP) is a low-interest loan program that includes grant (forgiveness) provisions and is designed to encourage small businesses to maintain payrolls and minimize layoffs. This is one of the most talked-about loan programs in America today and the facts regarding it are changing daily. The latest details are described below. We suggest you proceed with caution, but do not delay, as the dollars in this program may not last long.

In addition to the PPP, the SBA, under its own authority, has made available $300 billion in Economic Injury Disaster Loans (EIDL). Both programs are briefly described below. 

The EIDL program is tailored to meet the specific needs created by the COVID-19 pandemic and modeled after previous disaster relief programs of the SBA.  EIDL loans contain an immediate $10,000 GRANT just for applying.  The program provides low-interest loans with terms that can go up to 30 years depending upon an applicant’s circumstances. The loans are collateralized and require personal guarantees.  The loans are administered by the SBA and can be applied for on their website.

Loans issued under the “Paycheck Protection Program” are through authorized lenders under the SBA program, which will include many banks and business development centers.  These loans are nonrecourse loans and much can be forgivable.

  • The formula for the maximum loan amount is 2.5 times defined payroll costs, using payroll costs from the last twelve months.
  • Loan proceeds can be used for payroll costs, rent, mortgage interest, or utilities.
  • All or a portion of the loan can be forgiven if employee headcount and dollars are maintained under certain formulas. Not more than 25 percent of the loan forgiveness may be attributable to non-payroll costs.
  • Loans are for a term of two years with an interest rate of 1.0%.  Payments are deferred on the loans for a period of six months –  interest will accrue on these loans during the deferral period.
  • There are no personal guarantees and no collateral required.
  • Lenders may begin processing PPP loan applications as of Friday, April 3.
  • These loans are “first-come, first-served”.


Our friends at LB Carlson have supplied a SUMMARY of the CARES ACT as well as a PPP LOAN CALCULATOR to support your planning process. Printing Industry Midwest’s (PIM) Financial Executives Council (PIMFEC) will welcome financial management experts to explain the options available to manage your finances through this economic tumult during their next online meeting Wednesday, April 8, 2020. REGISTER. 


The pool of available dollars is limited so we recommend you do not delay in determining your loan strategies. DOWNLOAD FILLABLE PPP LOAN APPLICATION

If your company has applied for an SBA loan pursuant to CARES Act or the existing Economic Injury Disaster Loan program, please share that experience with PIM by emailing Steve Bonoff, President of PIM, directly. Let us know if you have any questions and we will do our best to research a response.

Sadie Hagen
Author: Sadie Hagen