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David Chubak, Head of U.S. Retail Banking

How the Paycheck Protection Program Can Help Your Small Business

The Economic Aid Act, which includes additional funding for the Paycheck Protection Program (PPP), was recently signed into law. If you are an existing business client, unless you already have a PPP loan, you may apply for a Small Business Administration (SBA) guaranteed low–interest loan. Your business's unique situation will determine the specific loan amount, if any, for which you may qualify. The maximum loan amount is $10 million, and is based on payroll and other eligible expenses. For the latest information from the SBA on how to calculate your maximum First Draw PPP Loan amount, please click here.

Generally, to be eligible for this program:

  • Your business may not employ more than 500 employees (with certain exceptions based on your industry)
  • Eligible businesses may:
    • Be in the lodging and food service sector with up to 500 employees per location
    • Be a 501(c)(3) organization, a 501(c)(19) Veteran Organization or a Tribal Business Concern with up to 500 employees
    • Be a seasonal employer that has (a) operated for no more than seven months in a year, or (b) earned no more than 1/3 of its receipts in any six month period in the prior calendar year
    • Be a sole proprietor or an independent contractor
    • Be a 501(c)(6), Destination Marketing Organization or a Housing Cooperative with up to 300 employees
    • Be a news organization with no more than 500 employees at any one location
  • If you receive a grant under section 24 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act, you are not eligible for the PPP program
  • Additional requirements apply to specific types of applicants. Please visit the SBA's website at for a complete list of eligibility requirements and the latest updates.

Eligible expenses include:

In order to be eligible for full loan forgiveness, at least 60% of your loan amount must be spent on payroll costs:

  • Payroll costs include payment to employees in the form of salary/wages/commissions/tips; payment for vacation/parental/family/medical or sick leave; allowance for separation or dismissal; payment for employee benefits consisting of group health care/life/disability/vision/or dental insurance payment or premiums; retirement; and payment of state and local taxes assessed on compensation of employees
  • For a sole proprietor or independent contractor with no employees: wages, commissions, income, or net earnings from self-employment

Once this payroll cost requirement is met, the loan amount is further eligible for forgiveness to the extent spent on Eligible Non-Payroll Expenses, including:

  • Business rent, utilities, or interest on mortgage obligations relating to services incurred or arising under an agreement executed before February 15, 2020
  • Certain operational expenditures for business software, cloud computing, other human resources and accounting needs
  • Costs related to property damage due to public disturbances that occurred during 2020 and are not covered by insurance, excluding residential property
  • Supplier costs pursuant to a contract for goods in effect prior to taking out the loan that are essential to the borrower's operations at the time at which the expenditure was made
  • Personal protective equipment and adaptive investments to comply with health and safety guidelines related to COVID-19
  • Note: If you use less than 60% of your loan amount for eligible payroll costs, you will be eligible for partial loan forgiveness based on the amount of your loan used for such costs divided by 60% of your loan amount

Covered Period:

  • Eligible expenses must be incurred or spent during a period of between 8 and 24 weeks following the funding of the loan

Before You Apply For a First Draw PPP Loan

To help make this as easy as possible, we've outlined the documents you'll need and the application process below.

Step 1

If you've placed a fraud alert on your credit bureau or frozen your credit, we may not be able to proceed with your application. Please contact all three credit bureaus before applying to consider your options.

Step 2

Please ensure your online banking access file is up–to–date, including your preferred email address and telephone contact information.

Step 3

Upload all relevant documentation that supports your payroll costs. Depending upon your business, these may include: Form 940, Form 941, Form 943, Form 944, Form 990 or 990-EZ (for nonprofit applicants), Form 1120 or 1120-S, Form W-2 or W-3, payroll processor records, other payroll tax filings, Form 1040 Schedule C, Form 1099–MISC, Form 1099-K, Form 1040–F for Farmers and Ranchers, Form 1065 (Schedule K-1) for Partnerships, and documentation of historical cash tips for businesses whose employees are paid cash tips, and other relevant documents.

If you included any of the following non–cash compensation payroll costs as part of your loan request, please provide supporting documentation, which may be included as part of the above documents: payment for vacation, parental, family, medical or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care or group life, disability, vision, or dental insurance, including insurance premiums, and retirement; and other relevant documents.

Please provide any payroll statement or similar documentation from the pay period that covered February 15, 2020 to establish your business was in operation and, if applicable, had employees on that date.

Step 4

Certain types of payroll costs are not eligible, including salaries that are in excess of $100,000 annually, salaries for any employee not a US resident, and qualified sick leave and family leave under the Families First Coronavirus Response Act. You are responsible for and will need to attest to deducting any employee salary in excess of $100,000 in your loan request along with other excluded payroll costs.

Helpful Resources

Economic Injury Disaster Loans

The Small Business Administration is offering low-interest loans for working capital to small businesses.

Learn More

Restaurant Revitalization Fund

Find key details, requirements, and eligibility for the SBA's Restaurant Revitalization Fund.

Read the press release

PPP Webcasts

Citi Senior Leaders provide information on the PPP Loan application process and documents needed to apply during live and pre–recorded webcasts.