Calculate an estimate of how much you can receive with a PPP loan.
The Paycheck Protection Program (PPP), established under The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), provides a financial lifeline for small businesses in the wake of the COVID-19 pandemic.
PPP loans will give a vast swath of small businesses the financial safety net they need to survive the economic downturn caused by the spread of the novel coronavirus, and it will be available to a broad number of American small businesses.
After initially lapsing on August 8, 2020, the program was revitalized for 2021 as a part of the $900 billion stimulus package.
But let’s be real—the calculations for PPP can feel complicated, so we made it as easy as we could to calculate your potential PPP loan amount because we know the last thing small business owners need to do right now is pour over legislation trying to make sense of it.
Borrowers can qualify for First and Second Draws on a PPP loan. For a First Draw, a borrower can qualify for a loan up to 2.5 times average monthly payroll costs. If you received a PPP loan during a previous round and need additional funding, you can apply for a Second Draw.
Businesses in food service, accommodations, and other qualifying industries (you need a NAICS code starting with “72”) may qualify for a Second Draw worth up to 3.5 times your monthly payroll costs. All other eligible industries may qualify for a Second Draw amount up to 2.5 times monthly payroll costs.
PPP loans for First and Second Draws will be capped following PPP maximums which are:
What will the SBA use to calculate? Because the small business landscape has changed so drastically since the beginning of February, that depends on how long your business has been open, whether it’s seasonal, and if you’ve taken out an EIDL.
For these businesses and nonprofits, the maximum First Draw loan size will be 2.5 times the average monthly payroll costs during the 12-month period prior to the loan being made.
In this case, the maximum First Draw loan amount is set at 2.5 times the average monthly payroll costs between January 1, 2020, and February 29, 2020.
For seasonal businesses, the SBA will use the average monthly payroll costs between February 1, 2019, and June 30, 2019, or March 1, 2019, and June 30, 2019.
Businesses with a NAICS code beginning “72” may qualify for up to 3.5 times their monthly payroll costs on their Second Draw.
Once you’ve qualified for an SBA loan under the Paycheck Protection Program (PPP), the amount of your PPP loan will be calculated using payroll costs including:
The following are excluded from PPP calculations:
SBA PPP loans have a 1.0% fixed rate APR for the life of the loan.
The maximum term for SBA PPP loans is 5 years.
Funds used to cover certain payroll-related costs in the first 24 weeks of the loan, starting at the origination date, are eligible to be forgiven.
(Say that heading fast 10 times.) One of the highlights of PPP loans for cashed strapped businesses is that payments are deferred for the first 10 months.
You can qualify for a PPP loan in addition to other SBA loans you may have already applied or qualified for, like an SBA Economic Injury and Disaster Loan (EIDL) or an SBA 7(a) loan, but the funds cannot be for the same intended use as another SBA loan. If you used an EIDL for payroll purposes and receive a PPP loan, the EIDL must be refinanced into the PPP.