Under the COVID Stimulus Bill’s Paycheck Protection Program, eligible businesses may receive up to $10 million in financial assistance from the federal government.

If your business has been negatively impacted by the COVID crisis, you may be eligible for a collateral-free loan to fund a significant portion of your business’s payroll, rent and utility expenses for up to two months. Better yet, under the Paycheck Protection Program, eligible loans will be forgiven to the extent funds are used to pay these qualifying expenses, with the federal government picking up the tab. While these loans can be used to pay some other categories of business expenses, those categories will generally not be eligible for debt forgiveness. In keeping with the intent of the legislation to preserve jobs, the Bill provides for a reduction in the total debt forgiveness a company may claim if the company reduces the number of its employees or reduces total salaries or wages.

Eligible businesses must have been in existence before February 15, 2020, and may not have more than 500 employees per site. In addition, an eligible business must certify that (i) current economic conditions make the loan request necessary to support the ongoing operation of the business, (ii) the funds will be used to retain workers and make payroll, and to pay qualifying rent or utility expenses, and (iii) the business hasn’t previously received a loan under the stimulus program for the same purpose. Some additional technical criteria apply (for example, to multi-site employers), and additional help may be available for certain mortgage expenses.

These one-of-a-kind loans will only be available through June 30, 2020, so prompt action is essential. Nonprofit organizations, sole proprietors, independent contractors and certain other categories of business associations are also eligible to apply.

Generally speaking, the loan program will be administered by existing SBA lenders, but other financial institutions may apply to participate in making these federally-guaranteed loans. To justify the amount of a loan request, applicants must present historical information to verify their average payroll expenses.


Kevin Merritt and Tim Forsman are attorneys at Gammage & Burnham. The seasoned team of professionals at Gammage & Burnham stands ready to assist your business in taking full advantage of the unprecedented benefits offered by the Paycheck Protection Program. If you would like help obtaining or making a loan under the Paycheck Protection Program, call Kevin Merritt at (602) 256-4481 or Tim Forsman at (602) 256-4477.