PPP loans, or Paycheck Protection Program loans, were a federal initiative in the United States created in 2020 under the CARES Act to help small businesses, self-employed workers, and certain nonprofits maintain their payroll during the COVID-19 pandemic. The program provided low-interest loans that could be forgiven if used primarily for payroll costs, rent, mortgage interest, and utilities, and if the business maintained employee and compensation levels

. Key features of PPP loans include:

• Loan amounts up to 2.5 times the applicant's average monthly payroll costs, with a maximum loan size of $10 million

• An interest rate of 1% with loan maturities initially at two years, extended to five years for loans approved after June 5, 2020

• No collateral or personal guarantees required, and loans are 100% guaranteed by the Small Business Administration (SBA)

• Loan payments were deferred until loan forgiveness was granted or up to ten months after the covered period if forgiveness was not sought

• Forgiveness was available if funds were used according to program rules, primarily for payroll and certain other expenses, and if employee retention criteria were met

The PPP officially ended on May 31, 2021, but existing borrowers could still apply for loan forgiveness after that date

. The program aimed to prevent layoffs and business closures during the pandemic, though it faced criticism regarding its cost-effectiveness and distribution of funds

. In summary, PPP loans were forgivable loans designed to help small businesses keep employees on payroll during the COVID-19 crisis by covering payroll and certain other essential expenses with favorable loan terms and forgiveness provisions