Disclaimer: This information was correct at the time of publication; however, new guidance from government agencies may be issued at any time, causing some or all of this information to change. Please visit our COVID-19 Business Strategy Hub for the latest news and ensure you are subscribed here to receive email alerts as they are released. We are working diligently to provide the most current information as it becomes available under our COVID-19 Actionable Insights For Businesses Series.

On Friday, April 3, 2020, banks will begin taking Small Business Administration (SBA) 7(a) loan applications under the CARES Act Paycheck Protection Program. This $349 billion program will provide much-needed relief to millions of small businesses so they can sustain their businesses and keep their workers employed. Businesses will be moving very quickly to take advantage of this program, and we strongly encourage you to do the same. While $349 billion sounds like a lot of money, it will run out fast. Since every bank should have the same process and the same loan terms, no need to shop. Go directly to the bank that you have a relationship with to apply for the 7(a) loan. Going to your banker should expedite the process. Also, we highly recommend that you calculate your own 7(a) loan amount and attach it to your application.

Below you will find a quick guide on how to apply for the 7(a) loans.

For more information on which businesses are eligible, allowable uses, key attributes, loan forgiveness, please read our previous blog: CARES Act Paycheck Protection Program 7(a) Loans – What You Need to Know.

When do the applications for CARES 7(a) loans open?

  • Small businesses and sole proprietorships can apply for loans under the federal Paycheck Protection Program (PPP) beginning Friday, April 3, 2020.
  • Independent contractors and self-employed individuals can apply starting on April 10, 2020.

How do I obtain a CARES 7(a) loan?

Any FDIC-approved institution should be able to make the loans, so call your banker to start the process. While the expectation is that nearly all banks and credit unions will be able to process program applications, call your bank to confirm they intend to support the program.

How do I calculate the CARES 7(a) maximum loan amount under the Paycheck Protection Program?

  • Lesser of:
    • 2.5 times the average monthly “payroll costs” over the last 12 months, plus the outstanding balance of Economic Injury Disaster Loan (EIDL) loans made after January 31, 2020, or
    • $10,000,000
  • “Payroll costs” are defined as salary, wage, commission, or similar compensation; payment of cash tip or equivalent; payment for vacation, parental, family, medical, or sick leave; allowance for dismissal or separation; payment required for the provisions of group health care benefits, including insurance premiums; payment of any retirement benefit; or payment of state or local tax assessed on the compensation of employees;
  • “Payroll costs” are limited to a maximum of $100,000 annualized salary per employee;
  • Payroll taxes cannot be included in the calculation.
  • “Payroll costs” will not include payroll paid on which a payroll tax credit was received under the FFCRA (no double dipping).

What documentation should I begin to gather to apply?

We believe that the following information may be required when making your application. We recommend you start gathering this now so you can apply on Friday, April 3, 2020, or as soon as possible thereafter.

  • We recommend that you calculate your own 7(a) loan amount and attach it to your application.
  • 2019 IRS Quarterly 940, 941 or 944 payroll tax reports
  • Payroll reports for a 12-month period (ending on your most recent payroll date), which will show the following information:
    • Gross wages for each employee, including officer(s) if paid W-2 wages
    • Paid time off for each employee
    • Vacation pay for each employee
    • Family medical leave pay for each employee
    • State and local taxes assessed on an employee’s compensation
  • 1099s for independent contractors for 2019
  • Documentation showing a total of all health insurance premiums paid by the company owner(s) under a group health plan
    • Include all employees and the company owners
  • Document the sum of all retirement plan funding that was paid by the company owner(s).
  • Do not include funding that came from employees out of their paycheck deferrals.
    • Include all employees and the company owners
    • Include 401K plans, Simple IRA, SEP IRAs

What do I do if I need help?

We understand this is a lot of information, and we are here to make the process easier for you and your business during this difficult time.

The Moore Colson team can assist you and your team with the following:

  • Calculating the 7(a) loan amount
  • Helping your business apply for the 7(a) loan
  • Calculating the forgiveness amount
  • Assisting with the forgiveness application
  • Helping with short and long-term cash flow projections
  • Helping calculate the credits under FFCRA and CARES Act

Please click here to contact us or call us at 770-989-0028 if you need help.

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Bert Mills, CPA, is the Managing Partner at Moore Colson. In his role, Bert sets the vision and mission of the Firm and works closely with the Firm’s leadership to drive and implement strategies. 

Andy Starnes, CPA, is a Partner and Tax Services Practice Leader Moore Colson. Andy’s specialties include corporate tax compliance and planning, business consulting, and multi-generational planning with a focus on the construction, professional services and staffing industries.

moore colson cpas advisors consulting partner chris tierney cfe ctp atlanta georgia

Chris Tierney, CTP, CFE, is a Partner and the Group Leader for Moore Colson’s Consulting Practice. Chris has over 32 years of experience in providing financial, operational and strategic management, analysis, and advice to domestic and international companies and their stakeholders.

Tyler Wright, CPA/ABV/CFF, CFE, is a Director in the firm’s Consulting Practice. Drawing on 15 years of experience as an external auditor, internal auditor, and forensic accountant, Tyler provides accounting and financial advice in forensic investigations and commercial disputes.




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