Paycheck Protection Program Business Application is Out
The is a time sensitive program, so you may want to consider applying ASAP.
Starting April 3, 2020- small businesses and sole proprietors can apply
Starting April 10, 2020- independent contractors and self-employed individuals can apply
The SBA has issued the application for the Paycheck Protection Program. This is an SBA-administered loan and loan forgiveness program that allows business to borrow up to 2.5 times your average monthly payroll.
To apply, you will need to do the following:
- Contact your banker and confirm they can process the loan.
- Fill out the application (SBA form 2483)
- Gather the following documentation:
- 2019 IRS Quarterly 940, 941 or 944 payroll tax reports.
- 2019 Summary payroll report by person.
- Payroll report must show the following for the time period above:
- Gross wages for each employee, including the officer(s) if paid W-2 wages.
- Family medical leave pay for each employee.
- State and Local taxes assessed on the employee’s compensation for each employee.
- 2019 W-3 and W-2’s filed.
- 1099s for 2019 for independent contractors that would otherwise be an employee of your business.
- Do NOT include 1099s for services.
- Documentation showing total of all health insurance premiums paid by the Company Owner 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 (do not include funding that came from the employee’s out of their paycheck deferrals).
- Include all employees, including company owners
4. Available is also an excel sheet to help organize and calculate the loan amount. Please let us know if you need a copy of this.
Overview of the Program
Q: How large can my loan be?
Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. That amount is subject to a $10 million cap. If you are a seasonal or new business, you will use different applicable time periods for your calculation. Payroll costs will be capped at $100,000 annualized for each employee.
Q: How much of my loan will be forgiven?
You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. You will also owe money if you do not maintain your staff and payroll.
- Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount
- Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019
- Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020
Q: How can I request loan forgiveness?
You can submit a request to the lender that is servicing the loan. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. The lender must make a decision on the forgiveness within 60 days.
Q: What can I use these loans for?
You should use the proceeds from these loans on your:
- Payroll costs, including benefits
- Interest on mortgage obligations, incurred before February 15, 2020
- Rent, under lease agreements in force before February 15, 2020
- Utilities, for which service began before February 15, 2020
