We tried to keep it simple based on our clients above but wanted to provide more info.  There are lots of different scenarios but its best to talk with a CPA or lawyer if you need help.  We also found that the banks are pretty knowledgeable.  

Who Qualifies?
You have to have payroll costs for employees that were paid prior to February 2020 (at this time 1099 contractors are not included but that may change).  A small business with fewer than 500 employees that was in business on or before February 15, 2020. This can be an S Corp, C corp, LLC, sole proprietorship or independent contractor. It also includes certain nonprofits, tribal groups and veteran groups. When obtaining the PPP loan, you need to certify that your business has been economically affected or that economic uncertainty make the loan necessary.

Eligible payroll expenses for calculating PPP loan amounts include:

• Compensation (salary, wages, commission, or similar compensation, cash tips, etc.)
• Payment for vacation, family, medical, and sick leave
• Allowance for employee dismissal or separation
• Payment for group health-care benefits, including insurance premiums
• Payment of employee retirement benefits
• Payment of state and local taxes imposed on the compensation of employees

However, the PPP does not count the following expenses when calculating the total PPP reimbursement amount:

• Any compensation over $100,000 per employee
• Taxes imposed under chapters 21 (payroll taxes), 22 (railroad taxes and retirement benefits), and 24 (income taxes withheld on wages) of the Internal Revenue Code (IRC)
• Compensation of employees whose principal place of residence is outside the United States
• Qualified sick and family leave for which a credit is already allowed under other sections (i.e., 7001 and 7003) of the Family First Coronavirus Response Act
• Loans used for duplicate purposes of another SBA loan program already claimed by the applicant

Once an eligible business receives the loan, they may use it for the following:

• Payroll costs
• Costs related to the continuation of group health-care benefits during periods of paid sick, medical, or family leave and insurance premiums
• Employee’s salaries, commissions, or similar compensation
• Payments of interest on any mortgage obligations (not including prepayment fees or payment of principal on the mortgage itself)
• Rent (including rents under a lease agreement)
• Utilities
• Interest on any other debt obligations that were incurred before the relevant covered period 

Notably, the SBA will fully forgive all loans under the PPP provided three requirements are met:

• Loans are used exclusively for their intended purposes (see bullet points directly above)
• Loans are used to offset no more than eight weeks (the maximum amount of time payroll expenses would be fully offset) of eligible payroll expenses
• Businesses retain employees at salary levels comparable to before the crisis

How Do I Get This Loan Forgiven?

This is the critical question. The loan forgiveness provision is the best part. You are eligible for loan forgiveness for the amounts you spend over the next eight weeks after receiving the loan on certain qualifying expenses. The qualifying expenses of the business over the eight-week period includes payroll costs, rent, interest on mortgage debt and utilities.

If the number of full-time employees is reduced over this time period or if your payroll costs are reduced 25 percent or more, then the amount of the loan eligible for forgiveness will be reduced.

The bank who granted the loan is who will determine the loan forgiveness amount based on the criteria above. The business will request forgiveness of the loan with evidence to the bank, and the bank will have 60 days to approve or deny the forgiveness.

When Do I Have to Pay It Back?
Loan payments are deferred for the first six months.  The loan term specified by the treasury guidance is two years. There is no pre-payment penalty though, so you can repay or have the loan forgiven earlier.

Do I Have to Put Up Collateral or Sign a Personal Guarantee?
No 🙂