Paycheck Protection Forgiveness

The State of Texas has approved over 134,737 Paycheck Protection Loans totaling $28,482,710,273.

As small business owners prepared to submit documentation for the Paycheck Protection loan forgiveness we want to make sure you have the most up to date information to make sure your business is protected.

What the Paycheck Protection Program Provides

Forgivable Loan for Small Business Owners with 500 or fewer employees

  • Payroll costs 
  •  25% of the forgiven amount may be used for non-payroll costs (mortgage, rent, utility costs)
  • Covers up to two months of average monthly payroll costs plus 25% of that amount


  • Funds must be used over the 8 week period following loan distribution(maximum $15,385 per individual)
  • Employee and compensation levels are maintained 

Who Can Apply for Paycheck Protection?

  • Sole proprietors
  • Partnerships
  • C-Corps
  • S-Corps
  • LLC's
  • Independent Contractors
  • Eligible self-employed individuals
  • 501 (c)(3) non-profits
  • 501(c)(19)veterans organizations
  • Tribal business(sec.31(b)(2)(C) of Small Business Act)

You can apply here


When to apply for the Paycheck Protection Program

Now is the time to make this application, if you have not already. You do not want to wait.

How you can use PPP money:

  • Rehire or retain staff during the pandemic
  • Up to 25% of rent or operating expenses
  • Payroll costs, including benefits
  • Interest on martgage obligations, incurred before February 15, 2020
  • Rent, under lease agreements in force before February 15, 2020
  • Utilities, for which service began before February 15, 2020


What counts as payroll costs?

  • Salary, wages, commissions, or tips
  • Employee benefits inculding costs for vaction, parental, family, medical, or sick leave; allowwance for seperation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payments of any retirement benefit
  • State and local taxes assessed on compensation

For sole proprietor or independent contractors

  • Wages
  • Commissions
  • Income
  • Net Earnings from self-employment

(capped at $100,000 on an annualized basis for each employee)

To calculate your potential payroll support, determine your average monthly labor cost, benefits expenses, and even vacation accrual and multiply by 2.5. That is your loan value.

Any other loan uses must be approved by your lender and documentation for payroll and all other claimed expenses must be provided.

Does the PPP cover paid sick leave?

Yes. The PPP covers payroll costs, which include employee benefits such as costs for parental, family, medical, or sick leave. However, it is worth noting that the CARES Act expressly excludes qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (FFCRA) (Public Law 116–127). Learn more about the FFCRA’s Paid Sick Leave Refundable Credit online.  

Things to know about your loan forgiveness

  • You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan.
  • Not more than 25% of the forgiven amount may be for non-payroll costs. 
  •  You will also owe money if you do not maintain your staff and payroll.  
  •  Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount
  •   Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019. 
  • Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020. 

How to request loan forgiveness?

  • Submit a request to your local bank that processed your application
  • Documents must cover the 8 week period following the loan 

What Documents Do You Need?

  • Form 941 and state quarterly wage unemployement insurance tax reporting or Payroll processing forms
  • Evidence of rent, business mortgage interest, business utility payments

The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. The lender must make a decision on the forgiveness within 60 days. 

Photo courtesyTim Mossholder

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