The Paycheck Payment Program (PPP) allows you to get low-interest private loans. It is designed to help small businesses so that they can keep their workers on payroll.
In this article, we will be discussing the general requirements to apply for PPP loan in USA and who is not eligible for PPP loan.
Requirements to apply for a PPP loan
The borrowers need to look into the programs deeply before getting a loan. Similarly, there are different requirements to apply for the PPP loan too. There are two rounds of applying for a PPP loan.
Thus, the requirements for both the rounds are different. If you’re looking forward to applying for a PPP loan, you will have to meet these requirements.
Let us dive into the discussion of who is eligible to apply for a PPP loan and who is not.
In order to be eligible for applying for a PPP loan, you need to meet the following requirements.
2. Operational Business
The loans are not provided for the businesses that are not operational, closed or not open yet. In case you want to get a PPP loan, your business must be open and operational.
3. Number of employees
PPP loan requires you to have a certain number of employees and not more than that. The number of employees should be 500 and not more.
You are allowed to have your business in more than one location but each location should have a maximum of 500 employees.
Who is not eligible for a PPP loan?
There are certain points that may make you ineligible for PPP loan. These activities that you must know are:
1. Closed Business
If a business is closed permanently, then the Paycheck Payment Program does not provide a loan for its reopening or any other purpose.
2. Prior Loss
If the business is in loss and defaulted even after taking loans from federal.
3. Passive business
The passive businesses that are not eligible for PPP loan include health care or nursing homes that do not provide healthcare anymore, residential homes that are not licensed, or properties engaged in re-sale.
4. Religion Promoting Businesses
The core purpose of some businesses is religion based. Such businesses which are involved in promoting religion are not allowed to get a PPP loan.
5. Employees are only housekeepers
If you only employee housekeepers in your business, there is a bright chance of rejection for PPP loan.
6. Affiliated Lender
You are allowed to take loans from lenders that you are no associated with. If you are an office person of the lender or any other close relative, you become non eligible for PPP loan.
7. Fraud Record
The owner who has 20% or more of the company, must not be involved in any fraud or other crimes. The record of the owners must be clean.
If you do not sit perfectly on their criteria, the lender has the right to call you ineligible for applying a PPP loan. Therefore, borrowers must go through the eligibility criteria before applying PPP loan.
In this blog we have tried to sum up the aspects related to eligibility to apply PPP loan. We hope this blog helped you understand the criteria. Do share your views with us in the comment box below.
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