To assert the necessity of a PPP loan, as noted in Questions 31 and 37 of the SBA’s PPP FAQs, an entity must take into account its ability to access other sources of liquidity sufficient to support its ongoing operations in a manner that is not significantly detrimental to its business. Sole proprietors, independent contractors, and self-employed personsĪdditionally, a borrower is required to certify that the “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”.Any business in the accommodation and food service industry (that is, any NAICS Code that begins with 72) with fewer than 500 employees per location.Any business or nonprofit organization that has fewer than 500 employees.A “small business” that meets the SBA’s size standards.8, 2020.Ī business that received a PPP loan should take care to document its basis both for certifying the need for the loan and for determining that it has sufficient qualifying expenses to request forgiveness, as well as the accounting policies related to the loan.Įntities that may have been eligible for PPP loans include The PPP was closed to additional small business applicants on Aug. The loans, which have a two- or five-year term (depending upon when they were issued) and bear interest at 1%, are provided through SBA-approved lenders to an eligible entity. The CARES Act, including subsequent amendments, earmarked over $600 million through the Paycheck Protection Program (PPP), administered by the Small Business Administration (SBA), for potentially forgivable loans to support eligible small businesses impacted by COVID-19. This publication has been modified in part to reflect certain provisions of the Consolidated Appropriations Act, 2021.
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