PPP Application Answers (Paycheck Protection Program)

Originally Published : April 1, 2020


Dear HL Clients,

The race is on as the banks are gearing up to accept PPP applications.  Who’s gonna get the money and when is it gonna run out and will there be enough for all of us and when can we apply and if an application gets filed, and no one is around to process it, does it make a sound?

These are the pressing questions and we are doing our very best to stay abreast of the shapeshifting rules for the PPP and other loans.  Joseph Levey has been at the helm of the loan application process and he has a deep understanding of how all of this is going to work.  Here is a summary of the things he thinks you need to know today.

Joey Regs says:

What a wild day it’s been in the SBA loan world.  As we’ve mentioned to you already, the information and guidance on the available loans is changing almost hourly. As we get closer to the 7A Express loan application going live, however, things are starting to shore up.  Let’s recap what you need to know now, based on some fundamental and major developments that have taken place within the last 24 hours…

The Department of Treasury has released the Form application for the 7A Express Loan, as well as a list of basic instructions.  This will NOT be the final version of the application, however, as each Bank will have the ability to modify, amend or add to this form before releasing it for use.  This does give us a good indication of the information and paperwork that will be needed though, and we can absolutely begin collecting those items now.  


The application can be submitted as early as April 3rd,  however, this is completely dependent on where you do your business banking
.  These applications will be made available via online platform provided by your bank – i.e. if you do your business banking at Chase, you are only eligible to apply through Chase’s portal, and you must have had a business checking account with Chase prior to February 15, 2020 to qualify. It is completely possible (and likely) that some banks will be quicker to the party than others.  Business owners who bank with the banks that will be up and running first will have an advantage here.  

This program will be open until June 30, 2020.  However, we highly recommend getting your application filed AS SOON AS POSSIBLE.  There is a finite sum in this pot, and once it’s gone, it’s gone.


Funds from this loan are to be used ONLY for the following:

– Payroll costs – including benefits; Payroll costs include:
– Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
– Employee benefits including costs for vacation, parental, family, medical or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits, including insurance premiums; and payment of any retirement benefit;
– State and local taxes assessed on compensation; and
– For a sole proprietor independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.

– Interest on mortgage obligations, incurred before February 15, 2020
– Rent, under lease agreements in effect before February 15, 2020
– Utilities, for which service began before February 15, 2020


No more than 25% of the total funded loan amount can be used for things other than “payroll expenses.” So, yes you can still use proceeds from this loan to pay your rent and utilities, but if that amounts to greater than 25% of the total loan amount, you run the risk of having a portion of those proceeds not being forgiven.

Previously the guidance was that your payroll had to be within 25% on June 30, 2020 of what it was on February 15, 2020.  There was no specification as to whether that contemplated head count, actual payroll dollar amount or both.  Today, it has been clarified that it means BOTH.  Headcount of employees must be the same (from Feb 2020 to June 30, 2020) and salaries may not be decreased by more than 25% to achieve the maximum amount of loan forgiveness.


We now have a citizenship requirement.  80% of the company must be owned by US citizens or permanent residents.

We will have a more in-depth breakdown of the application for you tomorrow.

UPDATE: SBA Disaster Relief Loan

For those of you interested in applying for the SBA Disaster Relief Loan, they have just changed this application yet again, BUT it is a change for the better.  The SBA has stripped away a number of the up-front requirements, in an effort to allow us to file applications quicker and to get you your cash advances quicker.  Whether some information will be needed later in the process or if it is just “going away” remains to be seen, so stay tuned. 

ALERT:  $$$$ for Employees – 

The National Restaurant Association has set up the Restaurant Employee Relief Fund, designed to provide one-time $500 grants to industry employees who have been adversely impacted financially by COVID-19, whether through a decrease in wages or loss of employment.
Applications open tomorrow and will be accepted on a first-come, first-basis: https://rerf.us/apply-for-aid/

Good night,