PPP 101: The basics
PPP is a loan program for small businesses that was created to provide relief from the economic impacts of COVID-19. It offers forgivable loans to cover up to 24 weeks of qualified expenses, including payroll costs (up to $100,000 per employee), mortgage interest payments, rent, and utilities. To have loans forgiven, at least 60% of the money must be used for payroll costs. Borrowers can choose which non-payroll costs to submit for forgiveness.
The loans have a fixed interest rate of 1% for any amounts that aren’t forgiven. Payments on principal, interest, and fees are deferred until the SBA makes its forgiveness determination for each loan and notifies the lender. Interest will accrue during this time.