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Paycheck Protection Program (PPP) – How much can I borrow?

I have determined that I am eligible for the Paycheck Protection Program (PPP). How much can I borrow?

Under the Paycheck Protection Program (PPP), the maximum loan amount is the lesser of $10 million or an amount that you will calculate using a payroll-based formula specified in the CARES Act, as explained below.

How do I calculate the maximum amount I can borrow under the Paycheck Protection Program (PPP)?

The following methodology, which is one of the methodologies contained in the Act, will be most useful for many applicants.

  • Step 1: Aggregate payroll costs (defined in detail below in f.) from the last twelve months for employees whose principal place of residence is the United States.
  • Step 2: Subtract any compensation paid to an employee in excess of an annual salary of $100,000 and/or any amounts paid to an independent contractor or sole proprietor in excess of $100,000 per year.
  • Step 3: Calculate average monthly payroll costs (divide the amount from Step 2 by 12).
  • Step 4: Multiply the average monthly payroll costs from Step 3 by 2.5.
  • Step 5: Add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid).

The examples below illustrate this methodology.

Example 1 – No employees make more than $100,000

  • Annual payroll: $120,000
  • Average monthly payroll: $10,000
  • Multiply by 2.5 = $25,000
  • Maximum loan amount is $25,000

Example 2 – Some employees make more than $100,000

  • Annual payroll: $1,500,000
  • Subtract compensation amounts in excess of an annual salary of $100,000: $1,200,000
  • Average monthly qualifying payroll: $100,000
  • Multiply by 2.5 = $250,000
  • Maximum loan amount is $250,000

Example 3 – No employees make more than $100,000, outstanding EIDL loan of $10,000

  • Annual payroll: $120,000
  • Average monthly payroll: $10,000
  • Multiply by 2.5 = $25,000
  • Add EIDL loan of $10,000 = $35,000
  • Maximum loan amount is $35,000

Example 4 – Some employees make more than $100,000, outstanding

  • EIDL loan of $10,000
  • Annual payroll: $1,500,000
  • Subtract compensation amounts in excess of an annual salary of $100,000: $1,200,000
  • Average monthly qualifying payroll: $100,000
  • Multiply by 2.5 = $250,000
  • Add EIDL loan of $10,000 = $260,000
  • Maximum loan amount is $260,000

Other Paycheck Protection Program (PPP) Resources:

For a top line overview of the program, click here.

If you’re a borrower, more information can be found here.

The application for borrowers can be found here.

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