How the new PPP loans will work

1 Businesses that received Paycheck Protection Program loans last year will be able to borrow up to $ 2 million as long as they have no more than 300 employees and suffered at least a 25 percent drop in quarterly revenue. First- time borrowers with no more than 500 workers will be able to borrow up to $ 10 million.

1 The loans, which can be forgiven, will have five- year terms and carry an interest rate of 1 percent.

1 The Small Business Administration will initially accept only applications submitted by community financial institutions, or CFIs, lenders whose customers are minority- owned and economically disadvantaged businesses. Starting Monday, applications for first- time borrowers submitted by these lenders will be accepted, followed by applications for second loans on Wednesday. SBA said it would begin accepting applications from all its lenders within a few days of that initial period reserved for CFIs.

1 As with the first two rounds of the PPP, applications must be submitted online at banks and other SBA- approved lenders. All applications must be submitted and approved by March 31. Loan amounts are calculated using a company’s payroll expenses; businesses can use either their 2019 or 2020 payroll to compute how much they can ask for.

1 Companies will have 24 weeks from the date they receive a loan to use the money. While 60 percent of the proceeds must be used for payroll in order for loans to be forgiven, companies can use the rest for employee health benefits, mortgage interest, rent, utilities and expenses that are essential to business operations.