Business owners are dazed and confused by the Small Business Administration’s lending programs. So let’s break down how to apply for one key offering: the Paycheck Protection Program.

The $350 billion lending program for businesses with up to 500 employees was signed into law by President Donald Trump as part of the $2 trillion coronavirus economic rescue package. Two important dates are Friday, April 3, the first day for small businesses and sole proprietorships to apply for loans of up to $10 million, and Friday, April 10, when self-employed and independent contractors can apply.

“It’s first come, first served, so the demand will be huge,” said Charlie Crawford, chief executive of Hyperion Bank.

Bankers are still awaiting guidance from the Treasury Department and Small Business Administration — less than 24 hours before the program was to launch. The final application was updated Friday and is available here:

Need a bank? Business owners can find a PPP lender now on SBA’s website:

“It’s a function of the speed at which the U.S. government, the SBA, the Treasury, and then the banking system are trying to implement this,” said Jim Donovan, senior vice president and head of commercial banking at Bryn Mawr Trust.

The most important thing is to get your application documents in order. Several accounting and law firms are circulating sample spreadsheets to submit your paperwork to the banks. Meridian Bank published a PPP Loans PowerPoint presentation to help members understand the program.

“I wish the feds had simply waited to put out one final application,” said Lance Bachmann, founder of 1SEO, a digital advertising agency based in Bucks County, who said as of Friday he had submitted at least three different versions. “Everyone is scared. I wish they would slow it down, and do it right. If we don’t get the payroll grants, we’ll have to lay off people. Already I’m not taking a salary this year."

Here’s what you need to know.

What’s your payroll?

Determine your head count. Can business owners include 1099 employees — part-timers and contractors — as part of overall payroll? Early guidance from the SBA is still shifting; on Friday, the feds said independent contractors had to apply on their own for loans, instead of employers including them as full-time employees.

Average payroll determines how much a business owner can borrow — it’s 2.5 times average monthly payroll. And “1099 employees will be covered in that payroll number," with a cap on salaries of $100,000, said Steve Bulger, regional director for SBA including Pennsylvania.

James R. Haefele, a partner with the Maple Shade-based accounting firm Haefele, Flanagan & Co., p.c., said he’s advising many of his clients to apply for Paycheck Protection loans.

“If this gets executed in a timely manner, it's going to get money into the hands of small businesses,” he said.

The rush to do so has created uncertainty about the program.

For example, the stimulus package and the SBA loan application give businesses conflicting guidance on the time period they should use to calculate their average monthly payrolls, Haefele said. That calculation affects the size of the loan, which is intended to cover payroll costs.

“Ultimately it’s going to matter on how each bank and lender choose to interpret the CARES Act and SBA guidelines,” Haefele wrote in a note to clients Wednesday, referring to the formal name of the stimulus legislation.

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His clients include restaurants that have been forced to close and construction companies that are also under stress.

“The companies are very fearful they’ll run out of money before they get the loan,” he said. They’re also worried the $350 billion fund will run out before their applications are processed, he said.

Banks may also ask prospective borrowers for proof the business was operating as of Feb. 15, tax forms for workers from 2019, 12 months of payroll reports, and documentation regarding health insurance premiums they pay, among other things.

How long will it take to get the money?

Short answer: It depends on the banks. SBA officials said on a call last week that once a bank confirms the borrower’s bona fides, the money could be wired the same day. But approvals through the banks could take days or weeks.

“Turnaround time will be much quicker than normal SBA loan time," Crawford said. "All that needs to be done is verify it’s been a business in business, then payroll verification. None of that is being done for these unsecured, no-guarantee loans.”

The SBA released final rules Thursday evening. The interest rate is 1% on loans. The Small Business website has final rules and regulations at

» READ MORE: Emergency coronavirus loan not approved yet? SBA will now advance $10,000 to small businesses.

Who’s lending the money?

Most banks already qualified as SBA lenders can provide PPP loans.

Other non-bank lenders or financial technology companies such as SoFi and Kabbage may also join in coming weeks.

“We have been part of several calls with the SBA actively trying to work through final guidance,” WSFS bank chief executive Rodger Levenson said. "With any program of this magnitude, it takes times to iron out the details, but we are all working toward it together. We know there is strong interest in the program and our team is preparing to assist customers as quickly as possible.”

What about fees?

Business borrowers pay no fees for PPP loans. The agent — a bank, accountant, or law firm — earns the fees for the loans from SBA.

Jeffrey Peskin, an accountant with Livingston, N.J.-based SobelCo, said it remains to be seen how quickly applications would be processed.

“The banks are still not really up to speed," he said. “They got extremely minimal notice.”

But the Treasury Department is pushing banks to “get money out there promptly,” Peskin said.

That might come back to bite some banks, Peskin said, if the SBA later says it won’t guarantee the loan because the borrower lacked proper documentation.

“We don’t know what’s going to happen there," he said. “Just my personal guess … some lawyers will get rich on that.”

“There are some businesses that are really desperate,” Peskin added. “This might be the thing that allows them to at least continue for a few months. Whether it’s going to mean long-term survival or not, we don’t know that.”

Your loan will be sold

If you do get a PPP loan, it’s likely the lender will sell the loan almost immediately.

“I think you’ll see the banks turn around and sell the loans back to Treasury, they’re only earning a 0.5% interest rate,” said Crawford, of Hyperion. “We’ll see everybody originate, process, and sell back maybe to SBA or Treasury. ... There’s always a secondary market for SBA government-guaranteed loans..”

Want to learn more?

The Pennsylvania Society of CPAs is holding a webinar Monday, April 6; you can register online here. Or check out the Small Business Development Center at Temple University’s Fox School of Business.