How Businesses Get Stimulus Money

Top view american flag on US dollars USA economic

Funds from the $2 trillion stimulus package are starting to be disbursed by the federal government. Small businesses are eligible for loans that can get converted into grants if certain requirements are met, individuals making less than $99,000 and couples making under $198,000 will receive a check, and a wider availability of unemployment benefits for those who have been laid off.

Here’s what you need to know about how to get access to the funds:

Businesses with fewer than 500 employees

(or 501(c)(3) organizations with under 500 employees) certain veteran organizations, freelancers, sole proprietors and gig workers are all eligible for the Paycheck Protection Program (PPP) loans.

The PPP loans are different from the disaster loans.

The disaster loans, which are for those in a state that has declared a state of emergency, have a 3.75% interest rate for businesses and 2.75% rate for nonprofits and will have to be paid back. If you apply for these loans, you are eligible to apply for a $10,000 grant that you would receive three days after applying.

The PPP loans are backed by the SBA but will be provided by lenders.

Interest rates cannot be higher than 4% and the maximum loan amount is $10 million. Lenders that are already part of the SBA’s 7(a) program are also qualified to make these loans.


Business owners and sole proprietors can begin applying for the PPP loans on April 3, and freelancers and individual contractors can apply on April 10.

PPP loans can be forgiven…

…if the funds are used for payroll expenses, mortgage payments, or rent and utility costs within eight weeks of receiving the loan. The forgiveness amount depends upon your headcount and can be reduced or increased based on layoffs or hiring. However, the SBA states “due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.”