At-a-glance: SBA's Paycheck Protection Program

Contributed by Jane C. Paddison, Attorney-at-Law, Hutchinson Black & Cook, LLC; and Kimberly A. Barr, Attorney/Owner, Colorado Nonprofit Law, PLLC. Both are members of the Community Foundation’s Board of Trustees.

Today, April 3, 2020, the Small Business Administration will begin accepting applications for the Paycheck Protection Program (PPP). This loan program is available to small (fewer than 500 employees) 501(c)(3) public charities and 501(c)(19) veteran organizations. Funds are available on a first-come, first-served basis.

For detailed information, please see the links below to the application and accompanying information sheets from the U.S. Treasury Department and the Small Business Administration. Keep in mind, however, that the guidance is not yet final and, therefore, may change.

PPA Quick Links


Paycheck Protection Program Highlights

  • The PPP loan is intended to be a “job retention” loan for small businesses and nonprofit organizations. It provides capital to small organizations so they can retain their employees.
  • The loan amounts are intended to pay up to 8 weeks of payroll costs, including benefits.
  • It is retroactive from Feb. 15, 2020, so employers can rehire their recently laid-off employees through June 30, 2020.
  • In addition to payroll costs, the loan may also be used for mortgage payments (interest only, not principal), rent and utilities.
  • Although it is a technically a loan program, if at least 75% of the loan funds are used to cover payroll costs, the loan will be fully forgiven entirely. In this regard, it is a grant, not a loan to the nonprofit.
  • The maximum loan amount is based on the nonprofit’s monthly payroll expenses. A nonprofit can borrow up to 2.5 times the organization’s average monthly payroll expense for the prior 12-month period, but no more than $10M.
  • Loans up to $1M are available on expedited basis under certain circumstances, although details about those circumstances are not yet clear.
  • The application, which will be available Friday, April 3, must be submitted to a bank or other SBA-certified lender.
  • Loan terms are the same regardless of lender. Interest rate for the two-year loan is fixed rate of 0.5%. Payments are deferred for six months. No collateral or personal guarantees will be required.
  • Nonprofits intending to apply for the loan should gather payroll tax reports (Forms 940, 941 and/or 944) and any other documentation that shows the organization’s last 12 months of payments made by the organization for employee wages, benefits (paid leave, health and retirement) and taxes.

In the event of delay in implementing this program, you may wish to follow the status via:


Coronavirus (COVID-19): Orientación y recursos de préstamos para las pequeñas empresas. LEER MÁS: sba.gov/espanol