What is the Payroll Protection Program? Why has it reopened?
The Paycheck Protection Program (PPP) provides loans to help businesses keep their workforces employed during the Coronavirus (COVID-19) crisis. This loan program provides loan forgiveness for businesses that demonstrate they have retained employees with the funds.
The Paycheck Protection Program (PPP) was established by the CARES Act, passed by Congress in March 2020, and implemented by the Small Business Administration with support from the Department of the Treasury with authorization for up to $659 billion for the program.
The PPP program reopened in January 2020 with additional funds authorized by the Economic Aid Act, including $15 billion set aside for First Draw PPP Loans of $250,000 or less directed to eligible borrowers with a maximum of 10 employees and located in low or moderate-income neighborhoods.
Lenders that elect to become a PPP lender must be approved by SBA and follow the agency’s program guidelines. While all participating lenders follow the same guidelines, details of the PPP loans they offer will vary from lender to lender.
What can I expect from a PPP loan with Pathway Lending?
Pathway Lending will consider applications from first-time PPP borrowers and offers loans starting up to $150,000.
Borrowers must repay any portion of the loan proceeds that do not qualify for forgiveness after the covered period expires. PPP loans have an interest rate of 1 percent, and loans issued after June 5, 2020 mature in five years.
PPP loans require no collateral nor personal guarantees, and neither lenders nor the government will charge any fees to small businesses.
Borrowers who apply for loan forgiveness will have deferred loan payments until SBA remits the borrower’s loan forgiveness amount to the lender.
Eight weeks after Pathway Lending disburses funds borrowers can apply for forgiveness.
If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period.
How do I apply?
Go to pathwaylending.org/ppp. You’ll answer a few brief questions to find out if a PPP loan from Pathway is a match for your business. If it’s a match, you will continue directly to the application and receive an email from your assigned lender. Otherwise, you will receive an email from Pathway with resources for finding another lender and getting application assistance from the Pathway team.
When you apply, have ready your tax and payroll documents referenced in our Documentation Process plus the following:
- Number of employees
- Business mailing address
- Email addresses of primary signer and owners with greater than 20 percent stake
You can find all approved participating PPP lenders in SBA’s Lender Match. To see the information lenders will require when you apply for a PPP loan, review SBA’s sample First Draw Form or Second Draw Form. Please note the forms are not PPP loan applications but rather a reference to help you prepare to complete an application with your chosen lender.
For assistance completing your application, contact your assigned lender, email firstname.lastname@example.org or call (615) 425-7171.
How can I get help with my application?
PPP applicants with Pathway Lending should start by contacting their assigned lenders for application assistance. We’ll also send you a PPP program guide and a video tutorial to help you calculate the eligible payroll amount. If you need further assistance, your lender will connect you with a member of our Business Advisory Services team.
Any Tennessee business applying for a PPP loan can seek application assistance from the Pathway team, no matter their lender. They can also register and enroll via Pathway Learning to access the PPP program guide and video tutorial for help calculating the eligible payroll amount. To request assistance, email email@example.com or call (615) 425-7171.
Additional information and updates can be found by visiting www.sba.gov/PPP or www.treasury.gov/cares.
There are many free and low-cost resources available from Pathway Lending and other technical assistance providers that may work just as well. PPP applicants with Pathway Lending should start by contacting their assigned lenders for application assistance included at no cost.
No matter their choice of PPP lender, businesses can register and enroll via Pathway Learning to access our PPP program guide and video tutorial for help calculating the eligible payroll amount.Or, they may request assistance via email at firstname.lastname@example.org or by phone at (615) 425-7171.
I received my first PPP loan from my bank and would like to apply for a second PPP loan. Should I apply with my bank or with Pathway Lending?
You should apply with your bank, primary financial institution or other lender considering applications from second-draw, or second-time, PPP borrowers.
Pathway Lending will consider applications from first-draw, or first-time, PPP borrowers.
To find an approved participating lender near you, consult SBA’s Lender Match.
How long are PPP applications open, and who can apply for a PPP loan?
Applications opened the week of January 11 and close March 31, 2021. New and existing PPP borrowers can apply for loans under the program guidelines. Some lending institutions will consider applications from both new and existing borrowers while others will consider applications only from first-time or second-time borrowers. Pathway Lending offers PPP loans up to $150,000 to first-time PPP borrowers in Tennessee.
How much can I apply for?
Note for sole proprietors, 1099 and self-employed businesses: SBA previously indicated these applicants should use net income (line 31 of Schedule C) to calculate the maximum loan amount. The agency is in the process of updating that formula to help these businesses access more financial support. We will update this answer to reflect final SBA guidance when we receive it.
Minimum and maximum loan sizes vary by lending institution but range up to $10 million for first-time borrowers and $20 million for second-time borrowers under PPP guidelines.
Pathway Lending offers first-time borrowers a maximum loan of the lesser or $150,000, or 2.5 times the borrower’s average monthly payroll costs in 2019 or 2020.
No matter the lender, the maximum is calculated based on the borrower’s average monthly payroll costs in 2019 or in 2020 times 2.5. Businesses with NAICS codes beginning with 72 may use 3.5 times average 2019 or 2020 payroll costs. Seasonal businesses that only operate for part of the year can use any 12-week period between February 15, 2019 and February 15, 2020 to determine average monthly payroll for their loan calculation.
See “How to Calculate Maximum Loan Amounts for First Draw PPP Loans” for more detail.
What if I'm self-employed and have multiple Schedule C forms for different business types?
Borrowers may use multiple Schedule C forms to calculate maximum loan amount. PPP applicants with Pathway Lending for which this circumstance applies should ask their assigned lender to connect them with a Business Advisor.