What Can You Use a PPP Loan For?

If you’re a small business owner, you may be wondering what you can use a PPP loan for. Here’s a quick rundown of some of the most common expenses that can be covered by a PPP loan.

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PPP Loan Basics

The CARES Act, passed in March 2020 in response to the COVID-19 pandemic, included the Paycheck Protection Program (PPP) as a way to help small businesses keep their employees on the payroll. The PPP loan is a forgivable loan, meaning that if you use the loan funds for certain expenses, you will not have to repay the loan.

What is a PPP loan?

A PPP loan is a loan designed to provide economic relief to small businesses and other eligible entities during the COVID-19 pandemic.

The loan is administered by the Small Business Administration (SBA) and can be used for a variety of expenses, including payroll, rent, utilities, and mortgage interest.

To be eligible for a PPP loan, you must have a small business that employs 500 or fewer employees, or meet the SBA’s size standards for your industry.

The maximum loan amount that you can receive is 2.5 times your average monthly payroll expenses, up to $10 million. The interest rate on the loan is 1%, and the loans are forgivable if they are used for their intended purpose (payroll, rent, utilities, mortgage interest).

You can apply for a PPP loan through any SBA-approved lender.

How can a PPP loan be used?

A PPP loan can be used for working capital expenses, employee salaries, mortgage or rent payments, and utility payments. The funds must be used within 24 weeks of receiving the loan.

PPP Loan Uses

Payroll costs

Payroll costs include:
-Salary, wage, commission, or tip income of up to $100,000 per year, pro-rated for the covered period
– Employee severance pay
– Continued group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums
– Retirement benefits
– State and local taxes assessed on employee compensation

Employee salaries

One of the most common uses for PPP loans is to cover employee salaries. If you have employees who are not working due to the pandemic, you can use PPP funds to keep them on your payroll and help them make ends meet. This can also include things like insurance premiums and other benefits.

Rent or mortgage payments

Your PPP loan can be used for several different purposes, including rent or mortgage payments. This is one of the most common uses for PPP loan funds, as it can help keep your business afloat during tough times.

Other common uses for PPP loan funds include utilities, payroll, and employee healthcare benefits. You can also use your PPP loan for certain non-payroll expenses, such as property damage caused by riots or protests.

Keep in mind that you must use your PPP loan for its intended purpose – if you don’t, you may have to repay the loan in full. For more information on what you can and cannot use your PPP loan for, check out the SBA’s guidelines.


Utilities are essential for businesses to function, and business owners can use PPP loans to cover these expenses. This can include electric, gas, water, sewer, internet, and phone bills. PPP loans can also be used to cover the cost of trash and recycling services.

PPP Loan Forgiveness

The PPP loan forgiveness program is a federal program that offers forgiveness for eligible PPP loans. You may be able to receive forgiveness for your PPP loan if you use the loan for eligible expenses and meet certain conditions. This section will cover the requirements for loan forgiveness and what you can use the loan for.

What is loan forgiveness?

Loan forgiveness is when the lender agrees to cancel all or part of a borrower’s debt. Loan forgiveness can happen for many reasons, such as the borrower making all of their required payments on time, working for a certain period of time, or meeting other requirements set by the lender.

Some loans are also forgiven if the borrower meets certain qualifications, such as working in a public service job or volunteering with a qualifying organization. For example, the federal government offers loan forgiveness programs for certain groups of people, such as teachers, nurses, and military members.

Loan forgiveness is different from loan deferment or loan forbearance, which temporarily postpone or reduce payments but do not eliminate the debt.

How to apply for loan forgiveness

You can apply for loan forgiveness through any SBA-recognized lender.

The SBA has a forgiveness application form that all borrowers will need to fill out. The application includes a Certification that the borrower reviewed the forgiveness guidelines and is requesting forgiveness in good faith.

The borrower will also need to provide documentation supporting their loan forgiveness request, including payroll records, evidence of mortgage or rent payments, and utility payments.

The SBA will review the application and supporting documentation and make a determination on loan forgiveness. If the SBA approves the request, they will notify the lender who will then disburse the funds to the borrower.

PPP Loan Tips

If you’re a small business owner, you may be wondering what you can use a PPP loan for. The PPP loan is a loan that is given to small businesses to help them with payroll and other expenses during the COVID-19 pandemic. Here are some tips on how to use your PPP loan.

Use an SBA-approved lender

The first step in applying for a Paycheck Protection Program loan is to find an SBA-approved lender.

You can use any lender that’s approved by the Small Business Administration, but some lenders may not be participating in the program. To increase your chances of getting approved, it’s best to choose a lender that’s participating in the program and has experience processing these types of loans.

Once you’ve found an SBA-approved lender, you can begin the application process. The application is available on the SBA website and can be completed online or downloaded and submitted through your chosen lender.

Before you begin, make sure you have all of the required documents and information on hand, including:
-Your business’s most recent tax return
-Your business’s income and expenses for the past year
-Your Personal Identification Number (PIN)

Keep good records

To maximize the chances that your PPP loan will be forgiven, it’s important to keep good records throughout the loan period. You should track how you use the loan proceeds and maintain documentation to support your use of the funds.

Your records should show how you spent the loan proceeds and how those expenses meet the criteria for forgiven expenses. For example, if you used PPP funds to pay employee salaries, you should maintain payroll records that show salary amounts, payment dates, and employee names.

You will also need to maintain records of any other eligible expenses, such as rent or mortgage payments, utilities, and covered operational expenses. Be sure to keep receipts, invoices, or other documentation to support your expenses.

Understand the terms and conditions

The first and most important thing you need to do before you apply for a PPP loan is to make sure you understand the terms and conditions. The SBA has released a list of eligible expenses, which include:

-Payroll costs
-Mortgage interest
-Interest on other debts incurred before February 15, 2020

You can use your PPP loan for any of these expenses, but you need to make sure you keep track of how you use the funds. The SBA will require documentation proving that you used the loan for eligible expenses, so it’s important to keep good records.

In addition to understanding the terms and conditions of the loan, it’s also important to understand the terms and conditions of your particular loan agreement. Make sure you read and understand the agreement before you sign it. Pay attention to things like the interest rate, repayment terms, and any fees or penalties associated with the loan.

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