What Is The Paycheck Protection Program?

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, a historic $2 trillion stimulus plan, was signed into law on Friday, March 27, 2020. Title 1 of the CARES Act is the Keeping American Workers Paid and Employed Act which includes the Paycheck Protection Program (PPP), an emergency lending provision that provides relief for small businesses and their employees who have been negatively impacted by the outbreak of COVID-19.

This legislation is administered by the Small Business Administration (SBA) under its 7(a) lending program with support from the Department of the Treasury, to provide small business loans on favorable terms to borrowers impacted by the current state of economic uncertainty. 

Though the SBA is still finalizing guidance documents, our current understanding of the Program is below.

Understanding The Basics

The Payment Protection Program is designed to provide businesses relief now so they can thrive later.

Loan proceeds may be used for specific qualifying expenses:
✓ Up To 8 Weeks Payroll Costs and Benefits
✓ A Portion of Your Mortgage Interest & Rent
✓ Utilities (electricity, gas, water, transportation, telephone, and internet)

Carpenter small business owner working at a work table


A small business that meets the SBA’s size standard of fewer than 500 employees.

  • 501(c)3 Nonprofit
  • Sole Proprietor
  • Independent Contractor
  • Tribal Business Concerns
  • 501(c)(19) Veterans Organization
  • Accommodation & Food Services sector (NAICS 72)
  • Certain industries can exceed 500 employees if they meet applicable SBA employee-based size standards
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Loan Terms

Total loan amount can be up to 2.5 times the average monthly payroll annualized costs, not to exceed $10 million.

  • 1% Annual Percentage Rate
  • 2-Year Fixed Term
  • No Payments for first 6 months
  • No Application, Processing, Participation or Pre-Payment Fees
  • No Collateral Required
  • $100,000 Payroll Costs Capped Per Employee
  • Loans Must Be Processed Prior to June 30, 2020
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Forgiveness can be up to 100% of the loan amount depending on how the money was spent.

  • The total amount of non-payroll costs may not exceed more than 25%.
  • A 25% or more reduction in employee headcount or paid wages will decrease the total amount forgiven.
  • Any changes to full-time employment and salary levels made between 2/15/20 and 4/26/20 must be restored by 6/30/20.
  • Certified documentation for eligible uses of funds, as well as necessary SBA Administrator documentation, is required.
  • Forgiven debt will not result in taxable income.
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Required Documentation

Providing your lender with the needed documentation for underwriting and SBA submission can have a major impact on how quickly your application can be processed and your loan funded.

See Documentation Checklist

How Loan Proceeds Can Be Used

✓ Payroll costs, including benefits
✓ A portion of the interest on mortgage obligations, incurred before February 15, 2020;
✓ Rent, under lease agreements in force before February 15, 2020; and
✓ Utilities, for which service began before February 15, 2020.

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Get Small Business Loans Faster

SBA Preferred Lender designation allows us to streamline the application and approval process.

Learn More

Paycheck Protection Program SAMPLE Application Form


U.S. Chamber of Commerce

Coronavirus Emergency Loans For Small Business Guide

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Coronavirus (COVID-19): Small Business Guidance & Loan Resources

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Frequently Asked Questions

When Can I Apply?

Starting April 3, 2020
small businesses, sole proprietorships, and nonprofits
Starting April 10, 2020
independent contractors and self-employed individuals

Where Can I Apply?

Businesses can apply through Tulsa FCU, a preferred SBA lender (or other qualified SBA lenders). We will be able to begin taking online applications soon. Until then, Click Here to view the application and begin filling it out.

What Counts As Payroll Costs?

• Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
• Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
• State and local taxes assessed on compensation; and
• For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.

How Long Will It Take To Get My Loan?

As a SBA Preferred Lender, Tulsa FCU will have delegated authority to make and approve loans without requiring SBA review or approval. This allows us to streamline the process and provide funds as quickly as possible.

How Do I Calculate My Average Monthly Payroll?

For purposes of calculating “Average Monthly Payroll”, most Applicants will use the average monthly payroll for 2019, excluding costs over $100,000 on an annualized basis for each employee. For seasonal businesses, the Applicant may elect to instead use average monthly payroll for the time period between February 15, 2019 and June 30, 2019, excluding costs over $100,000 on an annualized basis for each employee. For new businesses, average monthly payroll may be calculated using the time period from January 1, 2020 to February 29, 2020, excluding costs over $100,000 on an annualized basis for each employee.

What Do I Need To Certify?

As part of your application, you need to certify in good faith that:

• Current economic uncertainty makes the loan necessary to support your ongoing operations.
• The funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments.
• You have not and will not receive another loan under this program.
• You will provide to the lender documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting this loan.
• Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
• All the information you provided in your application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program is punishable by law.
• You acknowledge that the lender will calculate the eligible loan amount using the tax documents you submitted. You affirm that the tax documents are identical to those you submitted to the IRS. And you also understand, acknowledge, and agree that the lender can share the tax information with the SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.

What Do I Need To Apply?

Driver’s License for all owners with 20%+ share in the business: A color copy of the front and back of a valid (unexpired) Driver’s License for each owner.

Any documentation that can prove your payroll expenses. Acceptable Payroll Documents (listed in order of what seems to be the SBA’s preference):
For businesses applying for a PPP Loan
• 941 Quarterly Tax Filings (2019, 2020 Q1)
• 944 Annual Tax Filings (2019)
• Payroll Register for the previous 12 months
• 12 months most recent bank statements

For 1099 Independent Contractors or self-employed individuals applying for a PPP loan:
• IRS 1040 Schedule C
• 1099s (under which you were paid)
• Income and expense reports for 2019

Business account's bank statements for applicates without any record or other documentation.

What Are The Approved Uses For The Loan?

• employee salaries (including commissions and tips)
• group health premiums
• rent and utilities
• interest payments on mortgages or debt incurred before 2/15/20, not principal payments
• retirement benefits
• state or local tax assessed on compensation
• vacation, paid leave (family, medical, etc.)

How Do I Request Loan Forgiveness?

You can submit a request to the lender that is servicing the loan. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. Once the borrower submitted the request, the lender must make a decision on the forgiveness within 60 days.

How Much Of My Loan Will Be Forgiven?

You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
You will also owe money if you do not maintain your staff and payroll.
• Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount.
• Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
• Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.

Can I Apply For A PPP Loan and the EIDL?

Yes, but you must must apply for the EIDL directly through the SBA.

Paycheck Protection Program Loans are subject to to SBA eligibility guidelines, credit approval and program guidelines. Benefits and requirements are not finalized. This is not a complete description of all eligibility requirements. Additional program restrictions may apply. Tulsa FCU eligibility and membership required. Financing maximums and terms are determined by borrower qualifications and use of funds. Tulsa FCU does not provide tax advice. Consult an advisor regarding a particular financial situation.

All SBA PPP loan payments are deferred for 6 months; however, interest will continue to accrue over this period.

“Loan Forgiveness” is not a grant. A portion of the PPP loan that may be forgiven if the borrower provides the required evidence of eligible costs paid over an 8-week period following loan origination. These “eligible costs” include but are not limited to, payroll costs, rent, and mortgage interest payment, utilities (electricity, gas, water, transportation, and telephone or internet access). Certain actions may reduce the amount of forgiveness, such as reducing the number of employees or reducing employee salaries or wages. Documentation of your “eligible costs” and documents that verify the number of full-time equivalent employees and pay rates are required. You must certify that the documents are true.