Glossary term
Paycheck Protection Program (PPP)
The Paycheck Protection Program was a temporary COVID-era SBA loan program designed to help eligible businesses keep workers paid and cover certain approved costs.
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What Was the Paycheck Protection Program?
The Paycheck Protection Program, or PPP, was a temporary COVID-era SBA loan program designed to help eligible businesses keep workers paid and cover certain approved costs. The program was created during the pandemic and is no longer accepting new applications.
PPP loans became widely known because eligible borrowers could apply for forgiveness if they used funds for qualifying expenses and met program rules.
Key Takeaways
- PPP was a temporary pandemic-relief loan program administered through the SBA and participating lenders.
- The program was designed to support payroll and certain other eligible business costs.
- PPP loans could be forgiven if borrowers met program requirements.
- New PPP applications are no longer being accepted.
- Borrowers may still encounter PPP through forgiveness records, audits, tax documentation, or business-history review.
How PPP Worked
Eligible businesses applied through participating lenders. Loan amounts were generally connected to payroll costs, and funds could be used for payroll and certain other eligible expenses. Borrowers then applied for forgiveness if they met the program's requirements.
Because the program was created and revised during an emergency, rules changed over time. Borrowers needed documentation to support eligibility, use of funds, forgiveness, and related tax or accounting treatment.
PPP Compared With Ordinary Business Loans
Feature | PPP | Ordinary business loan |
|---|---|---|
Purpose | Pandemic payroll and eligible cost support | General business financing need |
Availability | Temporary program, no new applications | Depends on lender and program |
Forgiveness | Possible if rules were met | Usually not forgivable |
Documentation | Eligibility, payroll, expenses, and forgiveness records | Financial statements, credit, collateral, repayment ability |
Why PPP Still Matters
Even though PPP is closed, it can still matter in business records. A business sale, loan application, audit, tax review, or financial statement analysis may require understanding whether PPP funds were received, forgiven, or still recorded in financial documents.
PPP also remains an example of how emergency government lending can affect small business cash flow, payroll, and financial reporting.
The Bottom Line
The Paycheck Protection Program was a temporary SBA pandemic-relief loan program focused on payroll and approved business costs. It is closed to new applications, but PPP records can still matter for taxes, audits, financing, and business due diligence.