Has COVID-19 hurt your ability to meet payroll and keep your business running?

You may be eligible to receive up to 3.5 times your monthly payroll through SBA’s Paycheck Protection Program.

PPP loans are eligible to be forgiven (do not need to be repaid) if borrowers use the money for payroll and other approved expenses.

Paycheck Protection Program (PPP) FIRST DRAW loans overview

The U.S. Small Business Administration (SBA) is currently prioritizing PPP applications from approved lenders who are working on behalf of small business owners who
• did not receive a PPP loan in 2020 and
• do not have an existing relationship with a regional or national bank

The Washington Small Business Development Center (SBDC) has a network of more than 30 business advisors working across the state who can help with the application process. Washington SBDC Business Advisors appointment request

Small business owners who received a PPP loan in 2020 will be eligible to apply for a “second-draw” PPP loan with any SBA-approved 7a lender starting Jan. 13, provided they used their first PPP loan appropriately, have fewer than 300 employees, and have suffered at least a 25 percent drop in revenue because of the pandemic.
Both first- and second-draw PPP applicants are eligible to apply for up to 2.5 times their monthly payroll. (Accommodation or food service businesses that have a NAICS code that starts with 72 are eligible to borrow up to 3.5 times their monthly expenses). Loans are eligible to be forgiven if the borrower uses the money for payroll and other approved expenses. Congress has allocated $284 billion for this second round of PPP funding and the program is scheduled to run through March 31, 2021

Tips to Prepare for the PPP Application:
• Download the PPP application for borrowers at sba.gov/ppp First Draw PPP Loans
• If you need a lender, go to SBA’s Lender Match and enter basic information about your business
• Find and review 2019 tax return
• Make sure 2019 and 2020 business profit and loss statements are up-to-date
• Determine your highest average monthly payroll from either calendar year 2019 or 2020
• Gather other documents that you may need later: bank account statements, 3rd party payroll records, W2/W3 forms, tax forms such as 941, copies of funds transfers, direct payment 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 cancelled checks or account.

Note: PPP guidance from the SBA is available in more than 100 languages. Go to SBA.gov/ppp and click on the “Translate” button near the top right corner of the website

*This information is subject to change with new legislation or additional rules from the Treasury or SBA

Paycheck Protection Program (PPP) SECOND DRAW loans overview


Small businesses must:
» Employ not more than 300 employees;
» Have used or will use the full amount of its first PPP loan prior to the disbursement of a second loan; and
» Demonstrate at least a 25% reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter. Provides applicable timelines for businesses that were not in operation in Q1, Q2, Q3, and Q4 of 2019. Applications submitted on or after January 1, 2021 are eligible to utilize the gross receipts from the fourth quarter of 2020.
*Eligible entities include businesses, certain non-profit organizations, housing cooperatives, veterans’ organizations, tribal businesses, self-employed individuals, sole proprietors, independent contractors, and small agricultural co-operatives.

Loan Amount

» Borrowers may receive a loan amount of up to 2.5 times (3.5 times for accommodation and food services sector businesses) their average monthly payroll costs in 2019 or the 12 months prior to the loan application.
» Loan amount will be capped at $2 million per borrower with a maximum combined loan amount of $10 million between PPP1 and PPP2.

Use of Loan Proceeds

» Covered expenditures for operations. Payment for any software, cloud computing, and other human resources and accounting needs.
» Covered property damage costs. Costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance.
» Covered supplier costs. Payments to a supplier pursuant to a contract, purchase order, or order for goods that was in effect prior to taking out the loan and was essential to the recipient’s operations at the time at which the expenditure was made. Supplier costs of perishable goods can be made before or during the life of the loan.
» Covered worker protection expenditure. Investments in personal protective equipment and other adaptive costs to help a loan recipient comply with federal health and safety guidelines or any equivalent State and local guidance related to COVID-19 during the period between March 1, 2020, and the end of the national emergency declaration.
*Allows loans made under PPP before, on, or after the enactment of this act to be eligible to utilize the expanded forgivable expenses except borrowers that already had their loans forgiven.

Loan Forgiveness

Borrowers of a PPP second draw loan are eligible for loan forgiveness equal to the sum of their payroll costs, as well as covered mortgage, rent, and utility payments, covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures incurred during the covered period. Full forgiveness will still require the same 60/40 allocation between payroll and non-payroll costs that applies to initial PPP loans. The covered period begins on the loan origination date but allows all loan recipients to choose the ending date that is 8 or 24 weeks later.

*This information is subject to change with new legislation or additional rules from the Treasure or SBA

For the latest information, go to the SBA Paycheck Protection Program page at sba.gov paycheck protection program


Where to Get Additional Information & Support Resources:


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Contact Washington SBDC


(833) 492-7232