Your Top 3 Questions About the PPP Loan Application Process Answered

Please note that this blog is based on laws effective on April 6, 2020 and may not contain later amendments. Please contact Cray Kaiser for most recent information.

On Friday, April 3, 2020 many financial institutions began accepting applications for the Paycheck Protection Program (PPP) loans as provided for in the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act. With guidance for the program still being issued late last week, we received many questions regarding eligibility, computation and documentation. Below we’ve clarified the answers to these questions as we have them today, but please be aware information on these programs continues to evolve. If you would like additional support with your PPP loan application, please contact us at 630-953-4900.

Am I eligible for the PPP loan?

Generally, any business with 500 or less employees whose principal residence is in the United States can apply. This would also include tax-exempt nonprofit organizations (501(c)(3)), veteran organizations (501(c)(19)), and Tribal businesses. It’s important to note that independent contractors are eligible to file an application on their own and should not be included in the count of an organization’s employees nor in the payroll costs computation.

How do I compute my average payroll costs?

The computation is based upon payroll costs of your employees. Again, this does not include independent contractors, 1099 positions, or certain temporary laborers if those individuals are not your employees.

The computation should begin with gross payroll paid for the period which should be based upon the previous calendar year, unless your financial institution requires a different period. There are certain benefits such as health insurance premiums (net of employee contributions) and employer retirement plan contributions that can be added to the gross payroll. State unemployment tax payments made during the period can also be allocated to the computation.

Only $100,000 of payroll costs per employee can be considered in your computation. Hence, it is important to calculate the gross payroll per employee so that you can appropriately determine when the threshold of $100,000 has been met. That amount includes pay as well as benefit amounts paid on behalf of that employee.

You should not include any foreign compensation in the calculation nor in the employee count nor any qualified sick leave under Families First Coronavirus Response Act. Once you have your total payroll costs for the period, divide it by 12 to provide an average monthly payroll cost amount.

Your average payroll cost is then multiplied by 2.5 to reach the maximum loan amount you are eligible to receive.

What documentation do I need to provide?

Because documentation requirements vary by institution, we recommend applicants consult with their financial institution to confirm their specific requirements. However, these are some of the most common documents and calculations you will need to provide through the application process:

  • Payroll records such as Form 941, state unemployment tax reports
  • Health insurance premiums
  • Employer retirement plan contributions
  • Employee count as of February 15, 2020 based upon full time equivalents
  • Computation of average payroll counts and the necessary documentation to support the calculation

A standard PPP loan application (SBA Form 2483) is available at or  This application will need to be provided to your financial institution. The CK team is assisting clients in the application process by assembling payroll documents and computing average payroll costs and related employee counts. Please contact us today if you’d like any help or if you have any questions.


These are certainly trying times and we want to reiterate that Cray Kaiser is here for you. As things continue to evolve in light of the COVID-19 pandemic, we at CK are taking additional precautions for the benefit of our team members and our clients.

Effective immediately:

  • No clients or guests will be allowed in our suite.
  • All in-person meetings are cancelled. Instead, we will be utilizing phone calls and/or email to communicate with our clients.
  • Our team members are being encouraged to work remotely. All staff are equipped with the appropriate technology and resources to continue to securely and confidentially serve you from home.
  • We will no longer have in-person drop offs of accounting/tax data. Instead, please drop off any packages outside the office door of our suite in the box provided.
  • All paper files, tax returns etc. will no longer be mailed by our office to you. We will be holding these items in our office to send to you at a later date.


We want to remind our clients of our portal access and your ability to safely and securely share your information with our team. We ask that you email to request your portal access. This will eliminate the need for you to drop off your tax information at our office.


Thank you for your patience and understanding during this challenging time. We wish you, your family, and your business health and safety. We will continue to support you as best as we can while keeping each other’s health a priority. If any changes occur during the course of the next few days, we will update our website.

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