Paycheck Protection Program Gets New Funding For Business Loans
Any eligible business may now apply for a first or second draw Paycheck Protection Program loan through Community Bank of Pleasant Hill.
If you received a first draw PPP loan from Community Bank of Pleasant Hill, you should have already received a separate link to begin the application process. If you did not, please email [email protected].
If you did not receive a first draw PPP loan from Community Bank of Pleasant Hill, the button above will enable you to begin the application process.
**Please note: The application software works well with Google Chrome and may experience latency with Internet Explorer.
As part of the application process, you will be required to upload certain documentation. We have provided checklists contained in the links below based on three scenarios:
In addition, the following link details How To Calculate Your Loan Request Amount based on your business type.
Feel free to contact any of our associates at 816-540-2525 or [email protected] if you have questions about this program.
Small businesses interested applying for a potentially forgivable Paycheck Protection Program loan are being urged to apply quickly for funds from the more than $284 billion set aside as relief from the economic effects of the COVID-19 pandemic.
Options will include first- and second-draw opportunities. First-draw loans can be for up to $10 million and are for businesses with 500 or fewer employees who meet guidelines but were unable to receive a loan before funding ran out during two earlier rounds in the first part of 2020.
Second-draw loans are for businesses that had previously received a PPP loan and have used – or will use – their full first loan by the time a requested second loan would be disbursed. Second-draw loans can be for up to $2 million for businesses with 300 or fewer employees.
For businesses applying for a PPP loan, experts are recommending that you consult with your accountant or tax professional to ensure you have all of the necessary documentation and meet the requirements. Loan applications will be open until March 31.
Full guidance for first- and second-draw loans was released by the Small Business Administration on Jan. 6 in two interim final rules. Those documents are:
- ‘Business Loan Program Temporary Changes; Paycheck Protection Program as Amended,’ which details rules for first-time borrowers.
- And ‘Business Loan Program Temporary Changes; Paycheck Protection Program Second Draw Loans,’ which contains the guideline for second-draw applicants.
Here are some highlights and things to consider:
- Businesses applying for first-draw loans should have tax information, payroll information and details about eligible expenses.
- Those applying for second-draw loans will need to prove a revenue reduction of 25% or more in part or all of 2020 compared with part or all of 2019.
- To qualify for full loan forgiveness, borrowers need to spend at least 60% of the loan proceeds on payroll over a period of at least 8 weeks but no longer than 24 weeks.
- Other qualified forgiveness expenses include rent or mortgage payments; utilities; covered protective equipment for staff meant to comply with federal health and safety guidelines related to COVID-19; certain expenditures from vendors; covered operating costs such as cloud computing and software; and covered property damage costs related to disturbances that happened during 2020.
- First-draw applicants must have 500 or fewer employees and have been in operation on Feb. 15, 2020. Eligible applicants include sole proprietors; eligible self-employed; independent contractors; non-profits, including churches; eligible food-service and accommodation businesses operations; Sec. 501 (c)(6) business leagues such as chambers of commerce and visitor bureaus; as well as some news organizations.
- If PPP loan forgiveness is approved for funds spent on eligible expenses, the funds will not be taxable and deductions for the related expenses will be allowed on federal tax returns. This reverses a previous ruling denying those deductions. Individual states will decide if these deductions will be allowed on state tax returns.
- There will be a simplified one-page forgiveness application process for loans of $150,000 or less.
- PPP borrowers will not have to deduct any Economic Injury Disaster Loan advance funds from their PPP forgiveness amount.
- Borrowers can receive a loan amount of up to 2.5 times their annual monthly payrolls costs, although some borrowers that have NAICS codes starting with 72 - typically restaurants and hotels - may be eligible for up to 3.5 times those costs. There is an annualized $100,000 cap per employee.
Earlier PPP legislation had allotted nearly $660 billion for the loans and proved so popular that it quickly ran dry and stopped accepting new loan applications in early August 2020.
As was the case with the original program, this will be overseen by the Small Business Administration and administered by SBA-approved financial institutions. Applications will be made directly through participating financial institutions and when they are eligible to do so, businesses will be able to apply for loan forgiveness through the institution that issued them the loan.
Meanwhile, borrowers who had been approved for a PPP loan earlier in the year are now able to submit their application for loan forgiveness to their lender. Based on the borrower’s covered period following the PPP loan disbursement, the Small Business Administration states that:
“As long as a borrower submits its loan forgiveness application within 10 months of the completion of the Covered Period, the borrower is not required to make any payments until the forgiveness amount is remitted to the lender by SBA. If the loan is fully forgiven, the borrower is not responsible for any payments. If only a portion of the loan is forgiven, or if the forgiveness application is denied, any remaining balance due on the loan must be repaid by the borrower on or before the maturity date of the loan. Interest accrues during the time between the disbursement of the loan and SBA remittance of the forgiveness amount. The borrower is responsible for paying the accrued interest on any amount of the loan that is not forgiven. The lender is responsible for notifying the borrower of remittance by SBA of the loan forgiveness amount (or that SBA determined that no amount of the loan is eligible for forgiveness) and the date on which the borrower’s first payment is due, if applicable.”
The SBA also says that borrowers can submit a loan forgiveness application at any time before the maturity date of the loan, but “if a borrower does not apply for loan forgiveness within 10 months after the last day of the borrower’s loan forgiveness covered period, loan payments are no longer deferred, and the borrower must begin making payments on the loan. For example, a borrower whose covered period ends on October 30, 2020 has until August 30, 2021 to apply for forgiveness before loan repayment begins.”
If you have any questions about your PPP loan and the forgiveness application, it is recommended that you contact your lender, as well as your accountant or attorney if you have been working with them.
For additional resources about the Paycheck Protection Program, visit the SBA website at www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp.
The information in this article is not a comprehensive list of all PPP loan eligibility requirements. For complete details it is recommended that businesses consult their accountant, lawyer or tax professional, or to refer to the full SBA guidances regarding first- and second-draw PPP loans. More details or updates will be added to this article as necessary.
Contact us today. Email us at [email protected] with questions. Our loan experts are ready to assist with your loan application.
Visit SBA.gov for more information.