A couple and retailer use proper safe start techniques as a business reopens.

Round 2: Payment Protection Progam

Note: This is a federal program. The Washington State Department of Commerce has no additional information related to PPP loans. Additional technical assistance may be available through local SBDC Centers.

When the PPP loan portal system opened Jan. 11, it was opened to First Draw PPP loan applications from participating CFIs, which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), and Microloan Intermediaries.

Beginning Jan. 15 at 9 .m. ET, the loan portal for PPP-eligible lenders with $1 billion or less in assets for First and Second Draw applications.  The portal will fully open on Tuesday, January 19 to all participating PPP lenders to submit First and Second Draw loan applications to SBA. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program. More information is available on the SBA’s PPP loan page.

Loan Details

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.

  • PPP loans have an interest rate of 1%.
  • Loans issued prior to June 5 have a maturity of two years. Loans issued after June 5 have a maturity of five years.
  • Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower’s loan forgiveness amount to the lender. If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (either eight weeks or 24 weeks).
  • No collateral or personal guarantees are required.
  • Neither the government nor lenders will charge small businesses any fees.

What you can do to get ready to apply

If you wish to begin preparing your application, you can download the following PPP borrower application forms to see the information that will be requested from you when you apply with a lender:

Things you’ll need:

  • Find and review 2019 tax return.
  • Locate up to date 2019 and 2020 Business Profit and Loss statements.
  • Determine your highest average monthly payroll from either calendar year 2019 or 2020 or the last 12 months prior to the loan application.
  • Other documents you may need later Bank account statements, third party payroll records, W2/W3 forms, Tax forms such as 941, Copies of funds transfers, ACH, checks, State wage reporting documents for unemployment and L&I, For the employer portions of: health insurance, retirement plans and state/local taxes payment receipts and canceled checks or account statements.
  • Evidence of changes in gross revenue from 2019 to 2020.

First Draw

  • Business entities who did not receive a PPP loan in 2020.
  • First priority goes to first-time PPP borrowers, including minority-owned, veteran-owned, woman-owned and businesses in underserved markets.
  • Must show that they were in operation on or before February 15, 2020.
  • Maximum loan amount is $2 million (affiliation alliances may apply) and not more than 500 employees per physical location.
  • Accommodations and food service (NACIS 72) can employ 500 employees per physical location.
  • Loan amounts are based on 2.5 times average monthly payroll. It is 3.5 times average monthly payroll for accommodations and food services.

Second Draw

  • Eligibility is for businesses that have used or intend to use all of their first PPP loan funds.
  • Must document 25% reduction in gross revenue on an annual basis or in any one of the four quarters in 2020 as compared to 2019.
  • Loan amount maximum of $2 million and not more than 300 employees.
  • Only one second draw PPP loan is allowed.
  • Loan amounts are based on 2.5 times average monthly payroll. It is 3.5 times average monthly payroll for accommodations and food services.
  • Accommodations and food service (NACIS 72) can employ 300 employees per physical location.

Both Draws

  • Eligible entities are for-profit businesses, certain nonprofits including 501(c)(6), housing cooperatives, veterans’ organizations, tribal businesses, self-employed individuals, sole proprietors, independent contractors and small agricultural co-operatives.
  • Ineligible entities include those involved in political and lobbying activities, those involved in advocacy of public policy or political strategy such as think tanks, entities affiliated with the People Republic of China, Registered Foreign Agents.
  • Shuttered Venue Entities can receive a grant under a new program created by the new legislation but if they do, they are not eligible for a new PPP loan.
  • Extends the time of the PPP application program to March 31, 2021 and appropriates $284.45 billion for it.

Simplified Loan Forgiveness (up to $150,000)

  • Loan forgiveness for loans $150,000 or less will use a new short form that has not yet been developed.
  • The new form will be one page and includes a description of the number of employees that were retained because of the PPP loan and the estimated total amount of the loan spent on payroll costs.
  • The borrower will have to attest to certain certifications that demonstrate their compliance with the Paycheck Protection Program requirements.
  • Records necessary to support statutory or regulatory requirements may be required.
  • PPP borrowers are required to retain all relevant records related to employment for four years and other records for three years.
  • At least 60% of the use of PPP funds for payroll still applies.
  • Up to 40% of PPP funds can be applied to mortgage interest, rent, utility and covered operations expenditures including property damage costs, supplier costs and worker protection expenditures during the covered period.
  • In general, the loan forgiveness elements of the new legislation apply to loans made before, on or after the date on the enactment of the legislation including forgiveness of the loan.
  • Loan forgiveness may still be reduced for a borrower who reduced the number of employees retained and/or reduced the employee’s wages in excess of 25% and does not meet the available safe harbors.

Additional Uses Allowed

  • Additional uses allowed include certain operational expenses for computing, Human resources, accounting, supplier costs pursuant to a contract for goods and personal protective equipment.
  • Property damage caused by civil unrest is an allowed PPP expense.
  • Payroll costs can include group insurance including life, disability, health, vision, and/or dental insurance.
  • PPP loans made before, on or after enactment of the new legislation can use the expanded forgivable expenses unless the first PPP loan has already been forgiven.
  • Borrowers who returned all or part of their PPP loan funds may apply for a second draw PPP loan up to the $2 million maximum amount.
  • Farmers and ranchers who operate as sole proprietors, independent contractors, self-employed individuals may utilize their gross income from their 2019 Schedule F and were in business on Feb 15, 2020 to calculate their PPP loan amount. Farm credit institutions can make PPP loans.
  • A seasonal employer is one who operates for not more than seven months a year or earns no more than one-third of its receipts in any six months in the prior calendar year is eligible.
  • Housing Cooperatives as defined in section 216b if the IRS code are eligible.
  • FCC license holders and newspapers with more than one physical location and no more than 500 employees per location are eligible.
  • 501(c)(6) and Destination Marketing Organizations are eligible if no more than 15% of receipts and/or activities are from lobbying and the cost of lobbying did not exceed $1 million in the tax year prior to Feb. 15, 2020.

Additional Details

  • A PPP borrower may elect a covered period ending at the dates of the borrower’s choosing between 8 and 24 weeks after the funding of the PPP loan.
  • The loan amount is based on 2.5 times the average monthly payroll in one year prior to the loan or the calendar year.
  • Accommodations and food services (NAICS 72) can be 3.5 times avg. payroll.
  • Seasonal employers can determine loan amounts based on a 12 week period between Feb 15, 2019 and Feb 15, 2020. There is now a specific definition for seasonal businesses.
  • Businesses with multiple locations are eligible if they employ 300 or less total employees per location.
  • For all PPP loans, the borrow submits certification attesting to 25% revenue reduction on an annual basis or in any one of the four quarters in 2020 as compared to 2019.

Funding Specifically for Underserved and Low-Income Communities

  • Set aside of $15 billion for PPP loans to be issued by community financial institutions, including CDFIs and minority depository institutions (MDIs).
  • Set aside of $15 billion for PPP loans issued by certain other small depository institutions.
  • Set aside of $35 billion for first-time borrowers, $15 billion of which are for smaller, first-time borrowers with 10 or fewer employees.
  • $25 billion for second draw loans for smaller borrowers with 10 or fewer employees or loans less than $250,000 in low-income areas.
  • $25 million for Minority Business Development.
  • $57 million for microloan.


Additional Funding for Shuttered Venues ($15 billion)

Grants will be available to eligible live venue operators or promoters, theatrical producers, live performing arts operators, museum operators, motion picture operators, and talent reps who demonstrate a revenue reduction. The processing priority will be as follows:

  • First 14 days of program, grants will be awarded to venues with a minimum 90% revenue loss.
  • Second 14 days, grants awarded to venues with a minimum 70% revenue loss.
  • After 28 days, grants will be awarded to venues with less than a 70% revenue loss.
  • Initial grant can be up to $10 million with a supplemental at 50% of first grant.
  • $2 Billion set aside for entities with up to 50 FT employees.

Source: SBDC & SBA




Need assistance in a language other than English?

Commerce has a network of Business Resiliency partners who can help you with the application process.