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the head of an executive department, a member of partner that uses the funds incorrectly, the SBA will be able
Congress, or the spouse of such a person, directly to proceed against those individuals.
or indirectly owns, controls, or holds a controlling
interest in the entity (at least 20% of any class of equity May I or my business receive a PPP loan if my business
interest by vote or value); or has filed bankruptcy?
8. A publicly traded company, defined as an issuer, whose No, if the applicant or the owner is a debtor in a bank-
securities are listed on an exchange that is registered ruptcy proceeding at any time after he/she submits the
as a national securities exchange under Section 6 of application or before the loan is disbursed, the applicant
the Securities Exchange Act of 1934 (15 U.S.C. 78f). becomes ineligible. If the applicant applies for a PPP loan
and later files bankruptcy, it must immediately notify the
Important Points for Recipients lender to cancel it.
1. Second PPP Loans do not require personal guarantees.
2. Second PPP Loans do not require collateral. What if I forget to cancel the PPP loan after filing
3. The interest rate will be 100 basis points or one bankruptcy?
percent, calculated on a non-compounding, non-adjust- The lender and SBA will consider the use of the PPP
able basis. funds as unauthorized and may bring forth fraud charges.
4. The maturity date for the Second PPP is five (5) years.
I am self-employed and file a 1040 Schedule C. May I
Some Frequently Asked Questions receive a PPP loan?
What happens if the PPP funds are used incorrectly? You are eligible for a PPP loan if:
The SBA will direct the recipient to pay back the funds. If a re- • you were in operation on February 15, 2020;
cipient uses the PPP funds knowingly for an unauthorized • you are an individual with self-employment income
purpose, the recipient could be subject to fraud charges. (such as an independent contractor or a sole
If the recipient is a business, a shareholder, member, or proprietor);

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