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Paycheck Protection Program Loan Calculator

Created by Tibor Pál, PhD candidate and Dominik Czernia, PhD
Reviewed by Bogna Szyk and Jack Bowater
Last updated: Aug 15, 2023

Many of us are already exposed to the severe impact of the COVID-19 pandemic. While social distancing, self-isolation, and travel restrictions inevitably affect our daily social life, the economic burden of the crisis is particularly critical. Actions taken to contain the contagion, thus to protect our health, unavoidably have economic implications. The declining need for commodities and manufactured products led to a shrinking workforce and caused many jobs to be lost. Considering that small businesses account for about half of the employment in the private sector in the US where they create 2 out of 3 jobs, it is of primal concern to support this sector during such a difficult time. Moreover, the weaker ability to endure losses and to obtain loans compared to large enterprises make small businesses particularly vulnerable and place them in the front line of the crisis. For these reasons, the US government introduced the Paycheck Protection Program as a potential channel to combat the present crisis.

The Paycheck Protection Program loan calculator (PPP loan calculator) is a tool that allows you to find out how much money you are eligible to borrow to ameliorate the adverse economic effect on your business and employees caused by the COVID-19 crisis. The essential point of this federal relief program is that it offers forgivable loans to all small businesses, as long as they fulfill the required, mostly payroll-related, conditions.

Besides, whether you are already involved in this program or not, you can study the structure of the loan repayment through its amortization schedule and dynamic graphs, and see what the interest expenses are in case you don't qualify for loan forgiveness.

What are these requirements? Read on to find out! In the below article, you will also find all the necessary information about the Paycheck Protection Program, including loan specification, what you can use the received money for, and, most importantly, whether you qualify for the program or not.

Have you already heard about the coronavirus stimulus package? Visit our stimulus check calculator to check how much money you may receive!

Who can apply? - Do I qualify for the program?

The eligibility of the loan is straightforward: all businesses affected by the crisis operating with no more than 500 hundred employees - including nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors - might apply for the loan. Therefore, if you run a small business, and you can prove that the pandemic has negatively impacted your business, you might consider involving in the Paycheck Protection Program.

Note that if you employ more than 500 people employed, you may still be able to apply for the PPP loan, but only if you work in specific industries, and meet the SBA size standards. For more information, you may visit the official site of the U.S. Small Business Administration (SBA) website.

What is essential is to decide quickly: during the first round of the program, the $349 billion budget was exhausted about a week. On 27th, April the program was reopened with a budget of $250 billion that expected to last for a similarly short time.

When and how much of my loan will be forgiven?

The PPP loan is intended to fight unemployment problems during the COVID-19 pandemic. The main aim is to keep small businesses running with all workers. Therefore, if you retain workers and don't cut their wages, the government will forgive most or even all of the loan and repay the bank lenders themselves.

You will owe money if:

  • you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the eight weeks after getting the loan. Be aware that at least 75% of the forgiven amount must be for payroll costs;
  • you reduce the number of staff;
  • you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019; and
  • you won't restore your full-time employment and salary levels for any changes made between February 15, 2020, and April 26, 2020.

Information taken from the PPP information sheet for borrowers.

What can I use the PPP funds for?

As we mentioned before, at least 75 percent of the PPP loan is supposed to fund payroll costs. These includes:

  • Salary, wages, commissions, or tips (but capped at $100,000 on an annualized basis for each employee);
  • benefits as costs for vacation and parental, family, medical, or sick leave;
  • benefits as an allowance for separation or dismissal, group health care provisions (including insurance premium), or retirement payment;
  • state and local taxes; and
  • for a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment (capped at $100,000 on an annualized basis for each employee).

What to do if you or any of your employees had an annual salary of over $100,000 in 2019? You will still be able to claim it as payroll costs, but accordingly reduced, i.e., as $100,000 annually (or $8,333.33 monthly).

You can spend the remaining 25 percent on:

  • Interest on mortgage obligations incurred before February 15, 2020 (you can use our handy real interest rate calculator to find out this amount);
  • Rent, under lease agreements in force before February 15, 2020; and
  • utilities for which service began before February 15, 2020.

Loan specifications

All originated loans in the frame of the program have the following specifications.

  • Interest rate: 1.00% fixed rate.

  • Loan term: 2 years.

  • Loan deferment: 6 months.

  • Interest capitalization: monthly, from the beginning of the repayment period.

  • While all payments are deferred for six months, the interest will continue to accrue over this period and added to the loan balance at the end of deferment.

  • There are no prepayment penalties or fees.

  • There is no personal guarantee requirement.

Confused? Our loan calculator and loan balance calculator will make everything crystal clear!

How much funding can I receive?

The upper limit of the loan is the sum of two months of your average monthly payroll costs from the last year, plus an additional 25% of that amount. That amount is subject to a $10 million cap. If you are a seasonal or new business, you will use different applicable periods for your calculation - payroll costs will be capped at $100,000 annualized for each employee.

How do I apply?

If you want to apply for the loan, you should check the Paycheck Protection Program Borrower Application Form first to see which information you'll need to provide. Then you should find any existing SBA lender you may apply through, as the SBA doesn't lend you the money by itself. You can use [SBA'a lender match tool] for that purpose. If you do that, you should then consult with your local lender to find out whether it is participating and which documents you need to provide.

Remember that all loans will have the same terms regardless of the lender or borrower! The Payment Protection Program will be available until June 30, 2020, so you need to complete all formalities before that date. For more details, please visit the PPP loan FAQ.

Tibor Pál, PhD candidate and Dominik Czernia, PhD
Loan eligibility
I know my..
total payroll cost in 2019
Payroll cost in 2019
The maximum eligible loan amount, which is 2.5 times the average monthly payroll cost in 2019, is $250,000.
Loan specification
Required loan amount
Date of the loan origination
Extra monthly payment
Extra payments from
Payment summary
You can apply for loan forgiveness if you use the loan amount exclusively on payroll costs, mortgage interest, rent, and utilities payments for eight weeks after receiving the loan.
In any case, you can check the loan repayment details below.
You are required to pay $6,346.89 monthly, and you will pay off the loan on 16.09.2026.
After six months of loan deferment, the first payment will be due on 16.10.2024.
The total payable amount is $152,325.33, which includes an interest payment of $2,325.33.
Balances and schedules
balances with payment schedule
Due dateOpening BalanceMonthly PaymentMonthly PrincipalMonthly InterestClosing Balance
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