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What to do After Receiving a PPP Loan

The Paycheck Protection Program (PPP) is designed to get cash in the hands of suffering small businesses quickly, with less stringent eligibility requirements than the existing U.S. Small Business Administration (SBA) loan programs. PPP loans are designed to incentivize business owners to keep employees on payroll. These loans provide 100% federally guaranteed loans to small businesses, through Jun. 30, 2020. Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis.

Using Funds Appropriately to Remain Eligible for Forgiveness

U.S. small businesses that were able to secure financial relief through the SBA’s Payroll Protection Program should consider the following to help their cause for qualification of forgiveness of the full principal amount of the loan and any accrued interest:

  • Use the loan funds only toward: payroll, including salary, wages, tips and covered benefits for employees; rent or mortgage interest; and utilities.
  • Ensure at least 75% of loan funds are allocated for payroll costs.
  • Maintain the level of full-time employee (FTE) headcount without reduction during the eight-week covered period.
  • Maintain the salaries and wages of your workforce during the eight-week covered period. Any reduction of more than 25% for any employee who makes less than $100,000 will reduce the amount forgiven.
  • Preserve proper documentation to support the amount of proceeds used for payroll costs, rent or mortgage, and utilities.
  • Prior to June 30, 2020, restore all full-time employment and salary levels back from any reductions made between Feb. 15, 2020, and April 26, 2020.


We will continue to share information as it becomes available and keep you informed.

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Joe Thompson is a Client Advisor and Partner at Gulfshore Insurance who specializes in managing risk for community associations and various contractorsComments and questions are welcome at