What Are PPA Loans?

PPA Loans, also known as PPP Loans, are loans authorized by the CARES Act Paycheck Protection Program. They allow lenders who work with the Small Business Administration (SBA) lenders to borrow money to cover up to 8 weeks of payrolls costs, including benefits, interest on mortgages, rent, utilities, or to repay any outstanding amounts owed on SBA Economic Injury Disaster Loans (EIDL) that were received from January 31, 2020 to the date that PPA loans became available.


Businesses eligible to receive these loans include most businesses with 500 or fewer employees. In addition, sole proprietors, independent contractors, and self-employed individuals are also eligible for the loans, as are hospitality or food service businesses with fewer than 500 employees per location.

Businesses are not eligible for PPA loans for a number of reasons, including, but not limited to if they are engaged in any activities that are illegal under federal, state, or local laws; are household employers; have licensing issues; are involved in a bankruptcy; is currently in default on an SBA loan; has more than 20% of their ownership currently involved in a criminal charge.

How Much You Can Borrow

The most any business can borrow is $10 million. The max any individual can borrow is calculated by aggregating payroll costs from the last 12 months for all employees who principally reside in the United States; subtract any compensation to any employee or independent contractors that was in excess of $100,000 for that individual, calculate the average monthly payroll cost, multiply that number by 2.5, and add any outstanding amounts for any EIDL that was made from January 31, 2020 to April 3, 2020, minus the amount of any advances made under those programs. That is the maximum a business can borrow.

For more information about PPA loans and whether they can help you as an employer, employee, contractor, or sole proprietor contact Emerald Credit Solutions.

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