Generally, PPP funds can be used for four purposes: payroll, mortgage interest, rent/lease, and utilities. Payroll should be the major use of the loan. The second stimulus bill also introduced four new categories of expenses that are allowed.

What are the rules for using PPP funds?

You can use your loan proceeds to pay your expenses—payroll, rent, utilities, and mortgage interest. These are the expenses that, according to the CARES Act, will be forgiven by the SBA. In addition, there are other “eligible” uses of your PPP loan which, while allowed, will not be forgiven.

What expenses can be used for PPP loan?

Now, funds from a PPP loan can be used for any of the following purposes:

• Payroll expenses, including salaries and wages, paid time off, and employee benefits.
• Mortgage interest.
• Rent.
• Utilities.
• Operations, including software, cloud computing, human resources, and accounting needs.

What can PPP loan proceeds be used for?

The Paycheck Protection Program (PPP) established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act details what PPP loan proceeds can be used for, how to apply for loan forgiveness, and whether and to what extent, if used properly, loan proceeds can be forgiven.

What are the rules for fishing for PPP loans?

The SBA and the Treasury have tried to bridge these gaps in understanding by releasing specifically targeted advice and rules for telephone cooperatives, electric cooperatives, churches, employees with seasonal employees, and now fishermen.

What’s the forgiveness limit for a PPP loan?

The good news is that the long-promised simplified forgiveness loan forgiveness application for loans under $150,000 has finally been passed by Congress and enacted by the SBA. PPP borrowers — whether first-draw or second-draw — can now use a streamlined forgiveness application (3508S) that requires minimal documentation.

How much can you hire back with a PPP loan?

If you only hire back two out of the three employees, your workforce is 67% (two thirds) of your original headcount. Over the 24 weeks of the PPP coverage period, you spend $36,000 on your employees (more than your PPP loan amount). You claim the full $22,500 of your PPP loan for forgiveness.