WASHINGTON, D.C.-- Congressman Jack Bergman released additional information Tuesday about loans available through the Paycheck Protection Program:
The U.S. Department of Treasury has issued further information and frequently asked questions that can be found below or HERE. US Department of Treasury: Paycheck Protection Program (PPP) Information Sheet BORROWERS The Paycheck Protection Program 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:
Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to the likely high subscriptions, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. When can I apply?
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:
What counts as payroll costs? Payroll costs include:
Does the PPP cover paid sick leave? Yes, the PPP covers payroll costs, which include employee benefits such as costs for parental, family, medical, or sick leave. However, it is worth noting that the CARES Act expressly excludes qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (FFCRA) (Public Law 116–127). Learn more about the FFCRA’s Paid Sick Leave Refundable Credit online. 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.
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? 1.00% 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.
PPP Information for Churches Faith-based organization are also eligible for the Paycheck Protection Program. Answers to specific questions about the program for faith-based organizations can be found here: Who is eligible for the SBA Paycheck Protection Program? All churches are eligible for the forgivable loans available under the Paycheck Protection Program. Do you need to file a Form 990? No church should have to file a Form 990. If you are told you need to file a Form 990, please contact our office at (202) 225-4021. What box do you check on the SBA Application Form 2483?
Why should I check the “501(c)(3) nonprofit” box?
For more information: https://www.irs.gov/pub/irs-pdf/p1828.pdf |