A PPP loan, or Paycheck Protection Program loan, is a forgivable loan established by the U.S. federal government under the CARES Act in 2020 to help small businesses, self-employed individuals, and certain nonprofits keep their workforce employed during the COVID-19 pandemic

. The program was administered by the Small Business Administration (SBA) and provided funds to cover up to 8 weeks (later extended to 24 weeks) of payroll costs, including benefits, as well as certain other expenses such as mortgage interest, rent, utilities, worker protection costs related to COVID-19, and some operational expenses

. Key features of a PPP loan include:

• Loan amount up to 2.5 times the applicant's average monthly payroll costs

• Interest rate of 1%, with no fees or collateral required

• Loan maturity of two years for loans issued before June 5, 2020, and five years for loans issued after that date

• Loan payments deferred for six months or until the forgiveness application is processed

• Loan forgiveness is possible if the funds are used primarily for payroll (at least 60%) and if employee and compensation levels are maintained during the covered period

• Application was free, and borrowers applied through eligible private lenders with SBA backing

The program ended for new applications on May 31, 2021, but existing borrowers could still apply for loan forgiveness

. The PPP aimed to provide direct incentive for businesses to retain employees rather than laying them off during the economic disruptions caused by the pandemic

. In summary, a PPP loan is a government-backed loan designed to help small businesses maintain payroll and certain expenses during the COVID-19 crisis, with the potential for loan forgiveness if conditions are met