Answers To The 10 Most Frequently Asked Questions I’ve Received Regarding PPP Loans

In this episode, I answer the 10 most frequently asked questions I’ve received from business owners regarding the Paycheck Protection Program.

1. Can I use loan proceeds to hire new staff?

Answer: No. You must maintain current employment levels or rehire employees who were laid off or furloughed. At least 75% of loan proceeds must be used for payroll.

2. Can I use loan proceeds to pay my primary residence loan payment if I operate a home-based business?

Answer: No. Loan proceeds may only be used for commercial leases and mortgage interest on commercial loans. In the interim, you may request forbearance from your residential lender.

3. Can I use loan proceeds to make tenant improvements to my commercial building?

Answer: No. Tenant improvements are not an allowable use of PPP loan funds.

4. Will my bank take responsibility if I completed my PPP loan application incorrectly?

Answer: No. The federal government has granted banks immunity from responsibility related to the completion of PPP applications.

5. Can marijuana-related businesses receive PPP loan proceeds?

Answer: No. The manufacturing or distribution of marijuana is illegal at the federal level. Businesses engaged in these activities are not eligible to receive PPP funds.

6. Can I use loan proceeds to buy out a partner or acquire a new business?

Answer: No. PPP loan proceeds are intended to help maintain your business during a difficult time, not to facilitate growth or acquisition strategies.

7. Can I use loan proceeds to fund my marketing campaign?

Answer: No. PPP funds cannot be used for marketing purposes.

8. Can I be prosecuted for lying on the PPP loan application?

Answer: Yes. The Department of Justice is reviewing loan applications for misleading or fraudulent information and may pursue prosecution where appropriate.

9. What happens if I don’t use all of my loan proceeds?

Answer: You may either retain unused proceeds (which will convert into a loan) or return the unused funds to the bank during or after the eight-week covered period.

10. What if I don’t have any work for my employees?

Answer: You must rehire and pay your employees according to the specifications outlined in the PPP legislation, regardless of whether you currently have work available for them.

If you liked this content, let's connect on social media:

Instagram: https://instagram.com/mysbapro
Twitter: https://twitter.com/mysbapro
LinkedIn: https://linkedin.com/in/ryanpatryck

⁠More ThinkSBA Resources

⁠https://calendly.com/thinksba - Schedule Call
https://g.page/thinksba - Google Business Page & Reviews
https://thinksba.com/faq - Frequently Asked Questions
https://mysbaloanpro.com⁠ - My SBA Loan Pro Podcast
http://youtube.com/@thinksba - YouTube Channel