FAQ’s issued by the SBA and U.S. Treasury Dept. for Paycheck Protection Program

FAQ’s issued by the SBA and U.S. Treasury Dept. for Paycheck Protection Program

As previously shared, the SBA’s Paycheck Protection Program under the CARES Act makes available $349 billion for loans to small businesses to help prevent their collapse during the COVID-19 public health crisis. Since the launch of the Program, the SBA has released a formal application, as well as two interim rulings about the Program (see rulings one and two here). Despite these efforts, many small businesses remain confused about the Program, including the application process itself.

In an effort to provide more clarity, the government has released a set of frequently asked questions (“FAQs”) which address a variety of topics, including the following:  

  • Confirmation by lenders of the borrower’s average monthly payroll costs in determining the loan amount
  • Definition of a small business concern to determine loan eligibility
  • Clarification of the affiliation rules used to determine the size of the borrower
  • Calculation of an employee’s compensation in excess of $100,000 when determining the loan amount
  • Use of the loan to cover paid sick leave
  • Eligibility of seasonal businesses for the Program
  • Use of payroll providers to confirm wage and payroll tax information of a borrower
  • Permitted use of authorized representatives and signatories to apply for a loan
  • Consideration of prior criminal activity in determining Program eligibility
  • Use of online portals by lenders
  • Time periods used to determine the number of employees, payroll costs, and loan amounts
  • Inclusion of payments to independent contractors/sole-proprietors in calculating payroll costs
  • Accounting for Federal taxes in determining payroll costs and the loan amount
  • Reliance on previously released rules/guidance
  • Requirements concerning verification of borrower information by lenders
  • Promissory note requirements
  • Calculation of loan forgiveness amounts

In addition to these FAQs, the Treasury Department website offers several resources intended to help small businesses as they undertake the application process, including fact sheets, application forms, interim rules, and even a bank finder to help borrowers locate authorized lenders.

As always, we are happy to assist you with any aspect of the government’s relief assistance provided for under the CARES Act. Please contact Michael Cashton at or (401) 744-9647 or visit our website’s Contact Us page.  


Michael Cashton is a member of our New England-based team and brings over 20 years of experience representing emerging businesses, major corporations, and individual entrepreneurs across a range of industries, including consumer goods, SaaS/PaaS, ad-tech, digital gaming, e-commerce, retail, food service, and arts/entertainment. Before joining Outside GC, Michael served as VP of Legal for Hasbro, Inc., an international consumer products and branded entertainment company. He can be reached at or 401-744-9647.

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