SBA Federal Emergency Loan Programs

The U.S. Government has announced the availability of the emergency programs to assist eligible small businesses to weather the impact of the COVID-19 crisis which may provide you with critical financial support during these challenging times.


The Paycheck Protection Program (PPP) provides a loan to eligible small businesses for up to 2.5 times an applicant’s monthly average payroll costs from the prior year (but not to exceed $10 million).  Payroll is defined as payments of no greater than $100,000 in salary and wages per employee, health care and retirement benefits, family and medical leave, and state and local compensation on taxes. PPP Loan money must be used to cover payroll, rent, utilities and mortgage interest in the 8-week period after funds are dispersed. In addition to traditional small businesses, the CARES Act allows many entities in the accommodations and food services sector, as well as eligible franchises, to qualify for PPP Loans.

Borrowers are eligible for loan forgiveness on payroll, mortgage interest, rent, and utility costs that are paid during the 8-week period following the PPP loan origination date. Loan forgiveness on the total amount of these costs will be reduced if a borrower decreases the amount of salaries and wages by more than 25% and decreases the average monthly number of employees compared to past benchmarks. Any full-time employees and salary levels restored by June 30, will not be counted against you for the February 15 to April 26 time period. It is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs such as rent and utilities. Any amounts forgiven are not federally taxable as income, but accepting PPP loan forgiveness means that you may not also utilize the COVID-19 emergency payroll tax credit (which, if eligible, is capped at $5,000 of tax credit per employee). Amounts not forgiven convert to a loan with an interest rate of 0.5% and a term of 2 years. Payments will be deferred for 6 months while interest accrues. There is no prepayment penalty, personal guarantees or collateral requirements are not required, and it does not matter if you have access to other credit.

Applicants must apply through SBA-certified private lenders beginning on April 3 and ending on June 30.  It is widely believed that there will be very significant demand for PPP Loans and that they will be dispersed on a first come, first serve basis. Treasury has provided a Borrower Information Sheet and a PPP Application Form. You may wish to confer with your current private lender to determine if it is qualified to provide SBA loans or identify a lender with SBA’s location-based online lender referral tool.

Not sure if you are eligible or what is required to get started? PNC Bank has answers to your frequently asked PPP loan questions.


The Economic Injury Disaster Loan (EIDL) program provides non-forgivable loans of up to $2 million, at an interest rate of 3.75% and a term of up to 30 years, to cover ordinary and necessary operating expenses and reductions in working capital due to COVID-19, including fixed debts, payroll, accounts payable, and other bills disrupted due to the COVID-19 disaster. Applicants seeking EIDL funds may request a “Grant Advance” of up to $10,000, payable 3 days after application, to pay eligible and imminent operating costs related to the crisis, such as increased costs of materials, payroll, or rent or mortgage payments. An applicant is not required to repay any amount of the Grant Advance, even if does not receive an EIDL. Personal guarantees are not required for loans up to $200,000, and collateral may be required for loans over $25,000. Applicants can apply electronically directly at the SBA website.


Businesses can apply for loans under either of these programs, but proceeds from both programs cannot be used to cover the same economic loss. We recommend that you carefully evaluate with your advisors whether to utilize these SBA options, confirm that you meet eligibility requirements, and determine how best to utilize these potential funds during this difficult time.


To get started, please call your local bank or utilize these links: