Who is Not Eligible for a PPP Loan?
- Businesses That Are Not Eligible
- Types of Loans That Are Not Eligible
If you’re wondering whether or not you’re eligible for a Paycheck Protection Program (PPP) loan, you’re not alone. Many small business owners are still trying to figure out the ins and outs of this new program. Here’s a quick rundown of who is NOT eligible for a PPP loan .
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Businesses That Are Not Eligible
The Paycheck Protection Program (PPP) is a loan designed to help small businesses keep their employees on the payroll during the COVID-19 pandemic. The loans are 100% forgivable if the business uses the loan for payroll costs, mortgage interest, rent, and utilities. However, there are some businesses that are not eligible for the loan.
Businesses that are not small businesses
The SBA has released guidance specifying that businesses that are publicly traded on a major stock exchange are not small businesses and therefore are not eligible for PPP loans. The same is true for businesses that are majority owned by such companies. Federal contractors also are ineligible.
Businesses with an owner who is not a U.S. citizen or resident alien
The Paycheck Protection Program (PPP) is a loan designed to help small businesses keep their workers on the payroll during the COVID-19 pandemic. The PPP is part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was signed into law on March 27, 2020.
To be eligible for a PPP loan, businesses must meet certain criteria, including that they have 500 or fewer employees and that they are U.S.-based. Another eligibility requirement is that the business owner(s) must be U.S. citizens or resident aliens. This requirement excludes businesses with owners who are not U.S. citizens or resident aliens, such as businesses owned by foreigners with E-2 visas or green cards.
If you are not a U.S. citizen or resident alien, your business may still be eligible for other COVID-19 relief programs, such as the Economic Injury Disaster Loan (EIDL). For more information about eligibility requirements and how to apply for these programs, please visit SBA.gov/coronavirus
Businesses that are engaged in illegal activity
Businesses that are engaged in illegal activity are not eligible for PPP loans. This includes, but is not limited to, businesses that produce or sell illegal drugs, engage in human trafficking, launder money, or are otherwise engaged in criminal activity.
Types of Loans That Are Not Eligible
The PPP loan is a relief loan offered by the government to help small businesses during the COVID-19 pandemic. The loan is 100% forgivable if used for eligible expenses. However, there are some types of loans that are not eligible for the PPP loan. Here are some examples:
Loans that have been refinanced
If you have already refinanced your loan, you are not eligible for a PPP loan.
Loans that have been modified
A borrower is generally not eligible for a new PPP loan if the borrower has an existing loan that was modified on or after February 1, 2020.
However, a borrower with an existing PPP loan on which the lender has agreed to modify terms after February 1, 2020, may apply for a new PPP loan.
Loans that are in default
There are a few types of loans that are not eligible for the Paycheck Protection Program (PPP). These include:
-Loans that are in default
-Loans for illegal activities
-Loans that have been discharged through bankruptcy
-Loans that are made to assist a business engaged in (or assisting) any activity that is illegal under state, federal, or local law