With the Paycheck Protection Program (PPP), small businesses can borrow funds for COVID-19 relief to use for payroll, rent payments and more. Here are some helpful answers to the most common questions we receive on this program, including answers on PPP loan requirements.
This FAQ is for first-time (or “First Draw”) PPP borrowers. If you are looking to take out a second PPP loan, please visit our Second Draw PPP FAQ.
FAQs: Applying for a first-time PPP loan
FAQs: PPP Application Portal Questions
No – if you returned the PPP funding prior to December 27, 2020 you will select ‘No’ when asked if you received a prior PPP loan.
If your business is a franchise, please visit the SBA Franchise Directory to search to see if your franchise is on the list. Please include the Franchise Name and Franchise Code from the list on your application.
There is no delineation between full-time and part-time employees as part of the PPP application. SBA simply asks for a headcount of employees. This figure is purely for eligibility and does not impact loan forgiveness.
The Taxpayer Identification Number is the primary record indicator used by SBA to approve loans. If the business has an Employer Identification Number (EIN, formatted as XX-XXXXXXX), click the toggle for “Use Tax ID” and input this number. In most circumstances you will apply using the business EIN.
If you are a sole proprietorship, self-employed individual, or independent contractor and do not have an EIN, you may enter your Social Security Number (SSN, formatted as XXX-XX-XXXX) here instead.
The North American Industry Classification System (NAICS) Code is the specific industry the business operates in. This is a six-digit numeric code. You can typically find this code on your business tax return. If you cannot find this code on your tax documents, please review the NAICS website. Please see screenshots below for where you can find this code on Schedule C of IRS Form 1040, IRS Form 1065, and IRS Form 1120, respectively.
FAQs: First Draw PPP Eligibility
Here are the general eligibility requirements:
- You have not previously received a PPP loan. If you have received a PPP loan, visit our Second Draw PPP loans page
- You must have 500 or fewer employees
- A wide variety of businesses are eligible for the program. Both for-profit and certain non-profit small businesses are eligible. In addition, sole proprietorships, independent contractors, tribal businesses, and small agricultural co-ops can obtain PPP loans
Yes, you can apply. Your business must be only temporarily closed– so long as your business is temporarily and not permanently closed.
FAQs: First Draw PPP Loan Details
No, restaurants may only borrow up to 2.5x of your average monthly payroll.
No, the 25% decline in revenue is not a requirement for your first PPP loan.
Here are the general guidelines for spending your loan to have it forgiven. You must spend your loan within 24 weeks using these guidelines in order to have it fully forgiven.
- Payroll costs: 60% of your total loan amount
- Other costs (40% of your loan total) including:
- Loan and mortgage interest
- EIDL loans made between January 1 and April 3, 2020 can be refinanced
- HR, accounting, cloud computing and technology costs
- Property damage due to public disturbances in 2020, if they are not covered by insurance
- Payments to a supplier pursuant to a contract, purchase order, or order for goods that were in effect prior to receiving the PPP loan that are essential to your operations when the payments were made. Supplier costs for perishable goods can be made before or during the life of the loan
- Business upgrades needed to comply with local, State, or Federal COVID-19 regulations
- Personal protective equipment (PPE)
The best resource for specific loan forgiveness questions will be your accountant or attorney. You may also visit our more detailed PPP forgiveness FAQ. Please note that as your lender, Pursuit is not able to provide detailed information or advice on loan forgiveness.