Latest Clarifications on Applying for a “Paycheck Protection Program” Loan


Implementation of the Paycheck Protection Program (PPP), established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) has begun. Quite a few employers have applied to financial institutions for this loan and have been accepted into the program. Some of Cardinal’s employers have even already been approved for their PPP loans. 


The Small Business Administration [SBA] is addressing some of the issues that have surfaced during the rush to implement the program.  There are some hiccups and misinformation, so further revisions to the program are to be expected. Here is a quick overview of recent SBA clarifications—as of April 8, 2020: 

IRS Form 941 is not required for the application: The SBA does NOT require lenders to use any tax information, such as a Form 941, for purposes of underwriting your loan. The SBA makes clear in its interim final rule (SBA IFR) that lenders are not limited in the types of documentation they can use to determine your eligibility for a PPP loan and the amount of such loan.  However, some lenders are still not clear on this stipulation.  

Loan Documentation when using a payroll provider or Professional Employer Organization (PEO): Calculations based on a payroll report by a recognized third-party payroll processor are acceptable. The SBA recognizes that eligible borrowers that use PEOs or similar payroll providers are required under some state registration laws to report wages and other data on the Employer Identification Number (EIN) of the PEO or other payroll provider. In these cases, payroll documentation provided by the payroll provider that indicates the amount of wages and payroll taxes reported to the IRS by the payroll provider for the borrower’s employees will be considered acceptable PPP loan payroll documentation.  

If Cardinal is your payroll provider or if you co-employ through us, we will supply you with all the documentation you need to satisfy your lender’s requirements. Please send your requests for PPP documentation to  

Definition of “small business:The original loan program was offered to small businesses with less than 500 employees. New guidance states that businesses can be eligible borrowers even if they have more than 500 employees, as long as they satisfy the existing statutory and regulatory definition of a “small business concern” under section 3 of the Small Business Act, 15 U.S.C. 632. A business can qualify if it meets the SBA employee-based or revenue-based size standard corresponding to its primary industry. Go to for the industry size standards. 


Coronavirus/COVID-19 Employer Resources: Cardinal Services has a webpage devoted to the latest updates, important information, videos, and timely articles that can help your business during this difficult time. Click here to visit the source.