How a small business legal plan can help you get PPP loan?
SBA (U.S Small Business Administration) offers PPP (Paycheck Protection Program) loans to help small businesses dealing with the negative impact of the Covid-19 pandemic. 

PPP loans provide a direct incentive to various small businesses to keep their employees on the payroll.

The shutdowns and restrictions due to Covid-19 have hit small businesses severely. Some small businesses have been closed permanently, while some are running hard. 

PPP loan was introduced in March 2020 as a part of the CARES Act. It allows small businesses to receive up to 24 weeks of cash flow help through centralized assured loans.

The borrowers can apply for a PPP loan through SBA 7(a) lender or other financial institutions or non-bank lenders participating in this program. 

A lot of rules and procedures are to be followed by the small businesses to get PPP loans.

Several relief options are:

First Draw PPP Loans

Small businesses that had not received PPP loans in 2020 can apply for a first draw loan. 

The current borrowers of PPP loans who had not received loan forgiveness by Dec 2020 might be eligible for reapplying for a first draw PPP loan only if they had returned some portion or all the first draw PPP loans.


Second Draw PPP Loans

The borrowers who have got all benefits of a first draw loan in 2020 may only apply for a second draw PPP loan. 

It involves the same terms and conditions as the first draw PPP loan.


PPP Loan Forgiveness

Getting a rebate or forgiveness in some or the entire principal amount of a PPP loan and the interest is possible. 

Whether you are a first or second-draw PPP loan borrower, you may be eligible for complete loan forgiveness if you cover specific criteria. First, however, you are required to submit a loan forgiveness application.


Maximum Loan Amount

The maximum PPP loan amount for first-time borrowers is two and a half times their average monthly payroll cost of 2019 or 2020. 

You may either choose 2019 or 2020 for calculating the average payroll costs.



As per the CARES Act, loan forgiveness is not taxable income. Therefore, the borrowers cannot claim a tax deduction for expenses that caused PPP loan forgiveness.


If you want to know more about a PPP loan for your small business or want to apply for it, an expert can provide complete guidance in this process.


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