AOF CEO Luz Urrutia Meets with VP Harris Learn More

What is PPP (Paycheck Protection Program)?

The Paycheck Protection Program is a program through the SBA that, in response to the COVID-19 pandemic, provides loans to small businesses. Learn more about PPP, qualifications, and other commonly asked questions.

Share

About PPP

  • What is PPP?
  • Is Opportunity Fund accepting PPP Applications?
  • Do I qualify to apply for PPP?
  • How can I use PPP Loan Funds?
  • How much of PPP Loans can be forgiven?

Applying for a PPP loan

  • How do I start my PPP Loan Application?
  • How should I prepare to apply for a PPP loan?
  • What loan amount can I apply for?
  • What documents do I need to provide?
  • How do I get my loan application approved more quickly?

Common First Draw Application Questions

  • My employees receive 1099s, not W-2s. Can I add them to my PPP application as employees?
  • Do I need to provide my personal tax returns from last year?
  • I only have an ITIN, can I apply for PPP
  • I’m a sole proprietorship and heard the SBA has changed the rules on net income vs. gross receipts. How much can I apply for?

I already have a PPP loan

  • Can I apply for a second PPP loan?
  • Where can I apply for a second PPP loan?
  • How do I apply for PPP loan forgiveness?

Common Second Draw Application Questions

  • What reference periods can be used to determine whether I can demonstrate at least a 25 percent gross receipts reduction in order to qualify for a Second Draw PPP loan?
  • What documentation do I need to provide to prove that my business sustained at least a 25 percent reduction in gross receipts?
  • Where can I go for additional information about revenue reduction and maximum loan amounts for second draw PPP loans?
  • I just received a first draw PPP loan in 2021, can I apply for a second draw loan now too?

 

About PPP

What is PPP?

The Paycheck Protection Program or PPP is a federal program through the Small Business Administration (SBA) that, in response to the COVID-19 pandemic emergency, provides loans “designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.” For more information about the program, please review additional details posted on the SBA’s official website here.

In general, PPP loans have the following features to benefit small businesses:

  • PPP loans have an interest rate of 1%.
  • Loans have a maturity of five (5) years.
  • Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower’s loan forgiveness amount to the lender.
    • If a borrower does not apply for loan forgiveness, payments are deferred ten (10) months after the end of the covered period for the borrower’s loan forgiveness (either 8 weeks or 24 weeks).
  • No collateral or personal guarantees are required.
  • Neither the government nor lenders assess a loan fee.
  • SBA will forgive loans if all employee retention criteria are met, and loan funds are used for eligible expenses.

PPP loans are specifically intended to help small businesses, including sole proprietors and independent contractors, and private non-profits maintain payrolls and continue necessary payroll-related payments like rent and utilities as they respond to the challenges created by the COVID-19 emergency.

Is Opportunity Fund accepting PPP Applications?

Yes, Accion Opportunity Fund is accepting PPP Loan Applications for both first draw (applicants who have not received a PPP Loan before) and second draw applicants. All loans are issued by/through Opportunity Fund Community Development subject to CA Finance Lender license number 6050609.

Click here to start your PPP Loan Application.

Do I qualify to apply for PPP with Opportunity Fund?

The following entities (including small businesses) affected by COVID-19 may be eligible:

  • Sole proprietors, independent contractors, and self-employed persons
  • Any small business concern that meets SBA’s size standards (either the industry size standard or the alternative size standard)

Currently, Accion Opportunity Fund does not lend to certain industries, including (but not limited to):

  • Bars and Liquor Stores
  • Cigarette, Tobacco, Marijuana Retailers or Smoke Shops
  • Real Estate Investment or Development
  • Gas Stations
  • Car Dealerships
  • Firearm sellers, merchants, retailers, wholesalers
  • Gambling Institutions
  • Other Nonprofit Organizations
  • Other Finance and Trading Companies
Second Draw Eligibility

To be eligible for “second draw” PPP Loan (a borrower who has previously had a PPP loan and now wishes to acquire an additional PPP loan), a borrower is generally eligible if:

  • The business can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
  • The borrower previously received a First Draw PPP Loan, and will (or has) used the full amount only for authorized uses AND
  • The business has no more than 300 employees

How can I use PPP Loan Funds?

The goal of the PPP was to offer affordable, low-interest loans to help American small businesses, including sole proprietors and independent contractors, and private non-profits maintain payrolls and continue necessary payroll-related payments like rent and utilities in the face of the challenges created by the COVID-19 emergency.

In line with goals of the SBA and the Treasury Department, the loan may be used for:

  • Payroll costs: compensation in the form of salaries, wages, commissions, cash tip payments. If you don’t have employees, the loan can be used to cover owner’s compensation (net profits)
  • Healthcare costs: any costs related to the continuation of group healthcare benefits, including insurance premiums
  • Mortgage interest payments (but not payments on the mortgage principal)
  • Rent
  • Utilities
  • Interest on any other debt obligations incurred before February 15, 2020

How much of PPP Loans can be forgiven?

PPP Loan Forgiveness

PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:

  • Employee and compensation levels are maintained, except as outlined below
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • At least 60 percent of the proceeds are spent on payroll costs.
Other Eligible Expenses

Under the CARES Act, “payroll” expenses are generally defined to comprise the following types of expenses:

  • compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent
  • payment for vacation, parental, family, medical, or sick leave;
  • allowance for separation or dismissal;
  • payment for the provision of employee benefits consisting of group health care or group life, disability, vision, or dental insurance, including insurance premiums, and retirement;
  • payment of state and local taxes assessed on compensation of employees; and,
  • for an independent contractor or sole proprietor, wages, commissions, income, or net earnings from self-employment, or similar compensation

“Non-payroll” expenses are generally defined to include the following, if they were paid during the covered period, or incurred during the covered period and paid on or before the next billing date:

  • Interest payments (on business mortgage obligation(s) or personal property);
  • Rents;
  • Utility Payments;
  • Operations expenditures
  • Property damages
  • Supplier costs
  • Worker protection costs

Note: to be eligible for 100% loan forgiveness, eligible nonpayroll costs may not exceed forty percent (40%) of the loan forgiveness amount.

Employee and Compensation Levels

In some circumstances, if your business has laid off employees, this may impact how much your loan can be forgiven, but there are exceptions. Specifically, Borrowers are exempted from the loan forgiveness reduction arising from a reduction in the number of FTE employees during the covered period if the borrower is able to document in good faith an inability to return to the same level of business activity as the borrower was operating at before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention (CDC), or the Occupational Safety and Health Administration related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID19 (COVID Requirements or Guidance).

Forgiveness Estimator

Determining your PPP loan’s forgiveness-eligibility can be a relatively complex process, but there are some tools to make the process easier. You may also do an estimate on the excel sheet provided here. Please note this is an estimate.

To receive loan forgiveness, a borrower must provide documents verifying all payments for any payroll or nonpayroll costs spent during the covered period. Additionally, all documentation, calculations and amounts submitted must be certified from a representative of the business that the information is true and accurate to the best of their knowledge.

For the most up to date information, please visit the SBA’s PPP Loan Forgiveness Page.

Applying for a PPP loan

For a guide to Opportunity Fund’s online PPP application process, please watch the following video:

 

How do I start my PPP Loan Application?

Click here to begin your PPP Loan Application.

After starting the application, you’ll receive an email from notifications@venturesgo.com asking you to confirm your email address. If you don’t see that email in your general inbox within twenty-four (24) hours, please check your junk or spam folder. You must follow the link in this email to proceed with your application.

Note: This online application only works using Google Chrome on a desktop (not mobile) browser.

How should I prepare to apply for a PPP loan?

Please review the PPP Loan Amount and Document Guide, in preparation for your online application. You will need to submit the information from these documents as part of your application.

What loan amount can I apply for?

The principal amount of the PPP loan your business may qualify for is generally about 2.5 times the amount of your business’ monthly payroll costs. Please see what the SBA considered “payroll costs” above.

Additionally, you may wish to review the PPP Loan Amount and Document Guide for instructions on how to calculate your annual payroll, the maximum loan amount for which you may apply, and which documents you will need for your application. Once you have calculated your annual payroll, you may also click here to download the PPP Loan Amount Calculator to calculate your loan amount.

What documents do I need to provide?

Required documentation varies based on your legal structure and whether this is your first or second PPP Loan. Generally, you will need all the documentation you have to support the payment of any payroll or nonpayroll costs, as defined by the SBA and outlined above.

For required documentation by legal structure, please refer to the PPP Loan Amount and Document Guide.

How do I get my loan application approved more quickly?

Please visit our SBA PPP Application Requirements Page for Tips for a Speedy Approval.

However, please note that the SBA has indicated there may be slight delays in the review and approval of new loans. While you may be able to avoid delays by ensuring that you have provided correct and up-to-date information, your patience during the application review and approval process is appreciated both by the SBA and Opportunity Fund.

Common First Draw Application Questions

My employees receive 1099s, not W-2s. Can I add them to my PPP application as employees?

To be considered employees under the current outlines of the PPP program, employees must receive W-2s. Individuals who receive 1099s are considered contractors in the eyes of the government. 1099 contractors can apply for their own PPP loans.

Do I need to provide my personal tax returns from last year?

Yes, if you are applying for an individual PPP loan (application showing you as the only employee), you will need your personal tax returns (Form 1040) from last year. Even if you are not applying for a PPP loan as an independent contractor, we still ask that you include the first page of your personal tax return.

I only have an ITIN, can I apply for PPP?

As long as your business has an EIN, you can apply for PPP with your ITIN and your business’s EIN.

I’m a sole proprietorship and heard the SBA has changed the rules on net income vs. gross receipts. How much can I apply for?

As of this moment, we do not have clarity on how the loan amount will be calculated based on gross receipts, but if your net income was negative or very low, we would recommend waiting to apply after the SBA has issued further guidance on how to calculate loan amount based on gross receipts.

I already have a PPP loan (“Second Draw” PPP Loans)

Can I apply for a second PPP loan?

The second round of the SBA Paycheck Protection Program resumed on January 13th, 2021.

To be eligible for “second draw” PPP Loan (a borrower who has previously had a PPP loan and now wishes to acquire an additional PPP loan), a borrower is generally eligible if:

  • The Borrower previously received a First Draw PPP Loan, and will (or has) used the full amount only for authorized uses;
  • The business has no more than 300 employees; and
  • The business can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020

Where can I apply for a second PPP loan?

Click here to begin your PPP Loan Application.

How do I apply for PPP loan forgiveness?

Please visit our PPP Loan Forgiveness Resource Page for more information. We will need to send you your personalized link to apply. If you have not received it, please email ppphelp@opportunityfund.org.

 

Common Second Draw Application Questions

What reference periods can be used to determine whether I can demonstrate at least a 25 percent (25%) gross receipts reduction in order to qualify for a Second Draw PPP loan?

The appropriate reference periods depend on how long the applicant has been in business.

  • For all applicants, except those satisfying the conditions set forth below, the applicant must demonstrate that gross receipts in any calendar quarter of 2020 were at least 25 percent lower than the same quarter of 2019. Alternatively, applicants may compare annual gross receipts in 2020 with annual gross receipts in 2019 if they were in business all of 2019.
  • For entities not in business during the first and second quarters of 2019 but in operation during the third and fourth quarters of 2019, applicants must demonstrate that gross receipts in any quarter of 2020 were at least 25 percent lower than during either the third or fourth quarters of 2019.
  • For entities not in business during the first, second, and third quarters of 2019 but in operation during the fourth quarter of 2019, applicants must demonstrate that gross receipts in any quarter of 2020 were at least 25 percent lower than the fourth quarter of 2019.
  • For entities not in business during 2019 but in operation on February 15, 2020, applicants must demonstrate that gross receipts in the second, third, or fourth quarter of 2020 were at least 25 percent lower than the first quarter of 2020.

What documentation do I need to provide to prove that my business sustained at least a 25 percent (25%) reduction in gross receipts?

Applicants must provide ONE of the following to substantiate their certification of a 25 percent (25%) gross receipts reduction (only one of the following is required):

  • Quarterly financial statements for the business. If the financial statements are not audited, the applicant must sign and date the first page of the financial statement and initial all other pages, attesting to their accuracy. If the financial statements do not specifically identify the line item(s) that constitute gross receipts, the applicant must annotate which line item(s) constitute gross receipts.
  • Quarterly or monthly bank statements for the business showing deposits from the relevant quarters. The applicant must annotate, if it is not clear, which deposits listed on the bank statement constitute gross receipts (e.g., payments for purchases of goods and services) and which do not (e.g., capital infusions).
  • Annual IRS income tax filings of the business (required if using an annual reference period). If the business has not yet filed a tax return for 2020, the applicant must fill out the return forms, compute the relevant gross receipts value (see Question 5), and sign and date the return, attesting that the values that enter into the gross receipts computation are the same values that will be filed on the business’ tax return.

Where can I go for additional information about revenue reduction and maximum loan amounts for second draw PPP loans?

Additional information can be found on the Small Business Administration’s Second Draw Paycheck Protection Program (PPP) Loans: How to Calculate Revenue Reduction and Maximum Loan Amounts Including What Documentation to Provide Page

I just received a first draw PPP loan in 2021, can I apply for a second draw loan now too?

In order to apply for a second draw PPP loan, you must attest to having used all the funds from the first loan. If you have already used all funds from your first PPP loan then you can apply for a second loan.

 

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content and materials on this site are for general informational purposes and are intended solely to help applicants navigate the requirements of the SBA PPP loan program. The information on this website may not constitute the most up-to-date legal or other information as the SBA updates its information and rules frequently. We are making best efforts to maintain the accuracy of this information, but we cannot guarantee that it is up-to-date due to the frequency of program requirement and eligibility changes coming from the SBA.

Last Updated March 15th, 2021

Apply for a Loan

Get Started