Paycheck Protection Program Fact Sheet

Paycheck Protection Program Application

 

PAYCHECK PROTECTION PROGRAM (PPP) INFORMATION SHEET: BORROWERS

The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone.

The loan amounts will be forgiven as long as:

  • The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and
  • Employee and compensation levels are maintained.

Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.

Loan payments will be deferred for 6 months.

When can I apply?

  • Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
  • Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
  • Other regulated lenders will be available to make these loans as soon as they are approved and enrolled in the program. 

    Where can I apply? You can apply through any existing SBA lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. Visit www.sba.gov for a list of SBA lenders.

    Who can apply? All businesses – including nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply. Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries (click HERE for additional detail).

    For this program, the SBA’s affiliation standards are waived for small businesses (1) in the hotel and food services industries (click HERE for NAICS code 72 to confirm); or (2) that are franchises in the SBA’s Franchise Directory (click HERE to check); or (3) that receive financial assistance from small business investment companies licensed by the SBA. Additional guidance may be released as appropriate.

What do I need to apply? You will need to complete the Paycheck Protection Program loan application and submit the application with the required documentation to an approved lender that is available to process your application by June 30, 2020. Click HERE for the application.

What other documents will I need to include in my application? You will need to provide your lender with payroll documentation.

Do I need to first look for other funds before applying to this program? No. We are waiving the usual SBA requirement that you try to obtain some or all of the loan funds from other sources (i.e., we are waiving the Credit Elsewhere requirement).

How long will this program last? Although the program is open until June 30, 2020, we encourage you to apply as quickly as you can because there is a funding cap and lenders need time to process your loan.

How many loans can I take out under this program? Only one.
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; and
  • Utilities, for which service began before February 15, 2020.

 

What counts as payroll costs? Payroll costs include:

  • Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
  • Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
  •  State and local taxes assessed on compensation; and
  • For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.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.

    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.

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.

What is my interest rate? 0.50% fixed rate.

When do I need to start paying interest on my loan? All payments are deferred for 6 months; however, interest will continue to accrue over this period.

When is my loan due? In 2 years.

Can I pay my loan earlier than 2 years? Yes. There are no prepayment penalties or fees.

Do I need to pledge any collateral for these loans? No. No collateral is required.

Do I need to personally guarantee this loan? No. There is no personal guarantee requirement.

***However, if the proceeds are used for fraudulent purposes, the U.S. government will pursue criminal charges against you.***

What do I need to certify? As part of your application, you need to certify in good faith that:

  • Current economic uncertainty makes the loan necessary to support your ongoing operations.
  • The funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments.
  • You have not and will not receive another loan under this program.
  • You will provide to the lender documentation that verifies the number of full-time
  • equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting this loan.
  • Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
  • All the information you provided in your application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program is punishable by law.
  • You acknowledge that the lender will calculate the eligible loan amount using the tax documents you submitted. You affirm that the tax documents are identical to those you submitted to the IRS. And you also understand, acknowledge, and agree that the lender can share the tax information with the SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.

Coronavirus (COVID-19) Updated Resources for Employers

As COVID-19 continues to spread, employers face challenges as they take measures to prevent the spread of infection to and within their workforces while maintaining their business operations as usual.

As this situation evolves quickly, we are vigilantly monitoring updates from government agencies and our carrier partners. We will continue to provide brief updates on resources and tools that we believe will help your organization navigate through the challenges presented by COVID-19.

At this time, here are the recommended actions for employers:

  • Monitor guidelines from leading health authorities rather than the media, that includes:
  • Regularly check our website
    We continue to reach out to our medical carriers on your behalf. Important updates from medical carriers as it relates to coverage notifications, diagnostic testing, and member out-of-pocket costs will be posted on this page. In addition, we will continue to share commercial coverage information, safety, prevention, and other employer resources on this page.
  • Review this update: IRS Allows HDHPs To Cover Coronavirus Costs
    This change will allow HDHPs to pay for COVID-19 testing and treatment before an individual has met the plan’s deductible for the year.
  • Contact your service team member if you are a Self-Funded or Level-Funded plan. You may need to opt-in or opt-out of provisions eliminating out-of-pocket costs for COVID-19 testing, and we will assist in notifying your carrier.

We will keep you up-to-date as this situation continues to develop, and more information becomes available.

Preparing for Coronavirus

As the number of reported coronavirus cases continues to rise, employers are increasingly confronted with the possibility of a workplace outbreak – an outbreak that can create a number of safety and compliance concerns. 

The Centers for Disease Control (CDC) and public health experts have stated it’s simply a matter of time before the coronavirus spreads throughout the U.S.  Employers play a very significant role in averting the spread of the disease by preventing those who may be infected from infecting others in the workplace. Taking action now is the best thing to do. However, you may be wondering “what should, or can we do to avoid detrimental effects on our employees and business operations?”

As the situation quickly evolves, there are resources in place to help your business prepare for the onset of coronavirus.

Here are steps you can take to prepare your organization:

  • Track the coronavirus – Monitor the CDC website and WHO website daily to track the coronavirus, recently named COVID-19. It is important to check and follow these two organizations frequently for accurate updates rather than relying solely on the local news.
  • Review interim guidance from the CDC for employers – These strategies include how and when to encourage employees to stay at home and planning considerations.
    • Actively encourage sick employees to stay home. Employees who have symptoms of acute respiratory illness are recommended to stay home and not come to work until they are free of signs of a fever and any other symptoms of COVID-19 for at least 24 hours.
    • Separate sick employees. Employees who appear to have acute respiratory illness symptoms (e.g., cough or shortness of breath) upon arrival to work or become sick during the day should be separated from other employees and be sent home immediately.
    • Emphasize hand hygiene. Instruct employees to clean their hands often with an alcohol-based hand sanitizer that contains at least 60%-95% alcohol or wash their hands with soap and water for at least 20 seconds. Soap and water should be used preferentially if hands are visibly dirty.
    • Perform routine environmental cleaning. Employers should routinely clean all frequently touched surfaces in the workplace, such as workstations, countertops and doorknobs.

In addition to following the CDC’s interim guidance, employers should consider these
best practices to help prevent the spread of COVID-19:

  • Educate employees on the signs and symptoms of COVID-19 and the precautions that can be taken to minimize the risk of contracting the virus, without causing panic. If they have recently traveled, it is important they inform their healthcare provider. Travel history is now being considered the fifth “vital sign.”
  • Appoint a single individual or department as the point of contact within your organization for employee questions about COVID-19.
  • Review safety programs and emergency action plans to ensure that they include infectious-disease protocols.
  • Implement travel guidelines and procedures for approving travel to and from China.
  • Review HR Compliance Bulletin & Additional Resources
    • Employer Compliance Bulletin – This document touches on issues related to coronavirus. Download Bulletin 
    • Employee Communication – The American Red Cross has assembled easy steps to prevent the spread of COVID-19 for individuals. Read here
    • Develop a written policy / response plan that covers communicable diseases transmitted in the workplace. Take the time now to plan your responses in the event of a transmission and how it would be addressed.