Beginning Friday, April 3, 2020, small employers—those with less than 500 employees– can apply for and receive loans to cover payroll expenses through Small Business Administration lenders.  Specifically, “payroll expenses” include:

  • Employee wages/salary, including benefit costs and state and local taxes, up to a cap of $100,000 per employee on an annualized basis;
  • Rent on leases in effect before February 15, 2020;
  • Mortgage interest, incurred before February 15, 2020; and
  • Utility expenses, for which service began before February 15, 2020.

Beginning on April 10, 2020, self-employed individuals and independent contractors can apply for and receive loans for payroll expenses. Small employers can apply through any existing SBA lender or federally insured depository institution. Congress has allocated $349 billion for these loans, so small employers are encouraged to apply for these loans as soon as possible. A copy of the application is attached:

Loans under this program can be forgiven for a period of eight (8) weeks at a rate of 100%, provided that:

  • Employers do not reduce their workforce;
  • Employers do not reduce salary levels by 25% or more;
  • Employers restore their workforce to full-time employment and salary by June 30, 2020, for any reductions made between February 15, 2020 and April 26, 2020.

As far as loans to cover wages are concerned, eight weeks of salary, up to a max of $100,000, on an annualized basis ($15,384 max per employee) can be forgiven.  Loans can be extended in the amount of an employer’s average monthly payroll costs in 2019, multiplied by 2.5, for a maximum amount of $10 million, whichever is less. Small employers are encouraged to apply for PPP loans as soon as possible in order to keep their workforces intact.  Small employers are also encouraged to consult the information sheet recently provided by the Treasury Department, which is attached:


Since legal developments pertaining to COVID-19 are constantly evolving, we recommend that our clients call the Kullman Firm attorney(s) with whom they work for the most current guidance on these matters.