Paycheck Protection Program Forgiveness Resource Center

Updates, Video Training and Frequently Asked Questions on the PPP Loan Forgiveness Process

Bank of Blue Valley customers can now register and apply for PPP Loan Forgiveness

 

Click for our PPP Forgiveness Portal


The Paycheck Protection Program (PPP) is part of the Coronavirus Aid, Relief and Economic Security Act or CARES Act, which provides $2 trillion of aid and stimulus for both individuals and businesses. The PPP authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis.

On April 24, 2020, an additional package of $310 billion in funding was authorized for the Small Business Administration (SBA) PPP. This package aims to replenish the available funds to get PPP Loans to our nation’s small businesses.

On June 5, 2020, the PPP Flex Act was signed into law. This law provided additional flexibility to applicants and institutions. The changes include an extension of the applicable coverage period for expenses from eight weeks to 24 weeks (or December 31, 2020, whichever is sooner) after the application is approved. The term of any loan approved after June 5th has also been extended to a minimum maturity of five years.

Click for Our PPP Forgiveness Webinar Presentation Deck

Click for Our PPP Loan Forgiveness Portal User Guide

 


FAQ: Finding the Invitation Email

FAQ: Password Help


Latest Updates on the Paycheck Protection Program

 

Additional SBA Guidance Released - August 24, 2020

On August 24, the Small Business Administration (SBA), in consultation with the Department of the Treasury, provided guidance on the Treatment of Owners and Forgiveness of Certain Nonpayroll Costs. The complete SBA FAQ document can be found here.

 

SBA Guidance on PPP Loan Forgiveness - August 13, 2020

On August 11, the Small Business Administration (SBA), in consultation with the Department of the Treasury, provided guidance to address borrower and lender questions concerning forgiveness of Paycheck Protection Program (PPP) loans. The complete SBA FAQ document can be found here.


IMPORTANT NOTICE: The following FAQs are based on the provisions of the CARES Act as implemented and interpreted by the U.S. Small Business Administration (“SBA”) and the U.S. Treasury Department (“U.S. Treasury”) through interim and final regulations, FAQs, and regulatory guidance and interpretations. The SBA and U.S. Treasury continue to issue new regulations, FAQs and guidance that in some cases changes or conflicts with prior guidance. The eligibility of a PPP loan for forgiveness and the amount and timing of any forgiveness will be subject to and dependent on approval pursuant to the regulations, FAQs and guidance in effect at the time a request for forgiveness is processed and as a result, we cannot provide you any assurances regarding forgiveness of your loan until such approval is received and any review or audit by the SBA completed. The information provided herein is not intended to constitute legal advice. 

Frequently Asked Questions on PPP Loan Forgiveness

  • Q: WHERE CAN OUR CUSTOMERS APPLY FOR FORGIVENESS?

    A: Bank of Blue Valley customers can register and apply here.

  • Q: Who can apply for PPP Loan Forgiveness?

    A: Everyone who received a PPP Loan can apply for Forgiveness. Depending on how the funds were used, customers are eligible to receive full or partial forgiveness.

  • Q: WHAT DO CUSTOMERS NEED TO DO TO APPLY FOR FORGIVENESS?

    A: Customers will need to complete the PPP Forgiveness application here and submit the application with the required documentation by December 31, 2020 (or 24 weeks after the PPP loan was approved, whichever is earlier).

     

    The SBA has also provided a shortened application (3508EZ) for applicants who meet certain criteria. This application will be available through the bank’s PPP Forgiveness online application. Customers must answer and certify several criteria to be eligible for the shortened application. The shortened application does not result in a different forgiveness amount than the normal application process. As customers go through the steps in the forgiveness portal, it will automatically select the appropriate application relevant to a customer’s situation (and their certifications). Customers do not need to reach out to the bank for the shortened application form.

  • Q. Will the bank provide direct access to the PPP Forgiveness Portal to others outside my company?

    A. No. The privacy and security of our customer’s information is our highest priority. The bank will only provide direct access to the PPP Forgiveness Portal to our customers to apply for forgiveness for their PPP Loan.

  • Q: How does a customer calculate their average monthly Payroll Costs?

    A: Sum of Included payroll cost – sum of Excluded payroll costs = Payroll Costs

    Included Payroll Cost:

    1. For Employers: The sum of payments of any compensation with respect to employees that is a: 
      • 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 for group health care and retirement benefits
      • payment of state or local tax assessed on the compensation of the employee
    2. For Sole Proprietors, Independent Contractors, and Self-Employed Individuals: The net income not more than $100,000 in one year

    Excluded Payroll Cost: 

    1. Compensation of an individual employee in excess of an annual salary of $100,000 (note: employer contributions to healthcare and retirement benefits are not part of the amount deemed in excess of $100,000 annual salary)
    2. The employer portion of payroll taxes
    3. Any compensation of an employee whose principal place of residence is outside of the United States
    4. Qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (Public Law 116–  5 127); or qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act
  • Q: How could the forgiveness be reduced?

    A: The amount of loan forgiveness calculated above is reduced if there is a reduction in the number of employees or a reduction of greater than 25% in wages paid to employees.
    The forgiveness amount will also be reduced if a customer spent greater than 40% on non-payroll costs.

    For employees who earned $100,000 or less in 2019 (or were not employed by the borrower in 2019), the borrower’s loan forgiveness will be reduced for each employee whose average pay (salary or hourly wage) during the 24-week period is less than 75% of their average pay from the full quarter prior to the 24-week period (for most borrowers: January 1 to March 31, 2020). The amount of the reduction in loan forgiveness is based on the amount of the reduction in pay.

    Borrowers can avoid having their loan forgiveness amount reduced if they restore an employee’s pay. Specifically, if by no later than December 31, 2020, the employee’s annual salary or hourly wage is equal to or greater than their annual salary or hourly wage on February 15, 2020, the borrower’s loan forgiveness is not reduced.

  • Q: What if customers bring back employees or restore wages?

    A: Reductions in employment or wages that occur between February 15, 2020, and December 31, 2020, shall not reduce the amount of loan forgiveness IF by or on December 31, 2020, the borrower eliminates the reduction in employees or reduction in wages.

  • Q: What if customers are unable to rehire or replace employees?

    A: The Flex Act gives leniency to businesses that make reasonable efforts to replace or rehire staff but are unable to do so. The employer must demonstrate a “good faith” written offer to rehire at the same salary/wage, with a written denial of the offer from the employee.

  • Q: What other documents will customers need to include in their Forgiveness application?

    A: Customers will need to provide their lender with:

    Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or Alternative Covered Period.

    • Bank account statements or third-party payroll service provider reports documenting the amount cash compensation paid to employees.
    • Tax forms or third-party payroll reports that overlap with the Covered Period or Alternate Covered Period.
    • Payroll tax filings reported, or that will be reported to the IRS (typically, Form 941); and
    • State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that would be reported, to the relevant state.
    • Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the Borrower included in the forgiveness amount.

    FTE: Documentation showing:

    • The average number of FTE employees on payroll per week employed by the Borrower between February 15, 2019 and June 30, 2019;
    • The average number of FTE employees on payroll per week employed by the Borrower between January 1, 2020 and February 29, 2020; or
    • In the case of a seasonal employer the average number of FTE employees on payroll per week employed by the Borrower between February 15, 2019 and June 30, 2019; between January 1, 2020 and February 29, 2020; or any consecutive 12 week period between May 1, 2019 and September 15, 2019.
    • The selected time period must be the same time period selected for purposes of completing PPP Schedule A, line 11. Documents may include payroll tax filings that would be reported to the IRS or the state. Documents submitted may cover periods longer than the specific time period.

    Nonpayroll: Documentation verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period.

    • Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; or lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments.
    • Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.
    • Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.

    Form 3508 EZ:

    Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or Alternative Covered Period.

    • Bank account statements or third-party payroll service provider reports documenting the amount cash compensation paid to employees.
    • Tax forms or third-party payroll reports that overlap with the Covered Period or Alternate Covered Period.
    • Payroll tax filings reported, or that will be reported to the IRS (typically, Form 941); and
    • State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that would be reported, to the relevant state.
    • Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the Borrower included in the forgiveness amount.
    • If you checked only the second box on the checklist to determine the ability to use the EZ form, the average number of full-time equivalent employees on payroll employed by the Borrower on January 1, 2020 and at the end of the Covered Period.

    Nonpayroll: Documentation verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period.

    • Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; or lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments.
    • Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.
    • Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.
       

  • Q: How much of the PPP loan will be forgiven?

    A: Customers will owe money when the PPP loan is due if they use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 24 weeks after getting the loan. Not more than 40% of the forgiven amount may be for non-payroll costs.

    They will also owe money if they do not maintain their staff and payroll.

    • Number of Staff: A customer’s  loan forgiveness will be reduced if they decrease their full-time employee headcount.
    • Level of Payroll: Their loan forgiveness will also be reduced if they decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.

    The U.S. Chamber of Commerce provides a very good breakdown of the factors which go into the forgiveness amount. Click Here to see this breakdown.

  • Q: How can customers request loan forgiveness?

    A: Customers can submit a request to the bank that originated 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. Customers must certify that the documents are true and that they used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. The lender must decide on the forgiveness within 60 days.

  • Q: What is the maturity date of a PPP loan?

    A: If the loan was funded prior to June 5, 2020, there is a minimum maturity period of two years. Any loans funded after June 5, 2020, have a minimum maturity of five years.

  • Q: What is forgivable?

    A: The CARES Act lists two categories of expenses that are forgivable. These include "Eligible payroll costs" and "Eligible nonpayroll costs". This means that your PPP loan is forgivable to the extent you spend the proceeds of your loan on these two categories, provided you maintain the headcount and salaries of employees at the same pre-Covid-19 level, the loan will be forgiven. Another important requirement is that you actually pay for these expenses during the “covered period” or "alternative covered period" (if you qualify).  Based on the Paycheck Protection Program Flexibility Act of 2020 signed into law on 6/5/20, at least 60% of the PPP Loan must be spent on "Eligible payroll costs" and up to 40% can be spent on "Eligible nonpayroll costs".

    Eligible Payroll Costs:

    • Compensation to employees
    • Employer contributions for employee health insurace
    • Employer contributions to employee retirement plans
    • Employer state and local taxes assessed on employee compensation

    Eligible Nonpayroll Costs:

    • Interest on Covered Mortgages
    • Expenses for Rent or Lease Payments
    • Utility Expenses

     

  • Q: What are Eligible Payroll Costs?

    A: 
    Borrowers are generally eligible for forgiveness for the payroll costs paid and payroll costs incurred during the 24-week (168-day) or 8-week (56-day) Covered Period (or Alternative Payroll Covered Period) (“payroll costs”). Payroll costs are considered paid on the day that paychecks are distributed or the Borrower originates an ACH credit transaction. Payroll costs are considered incurred on the day that the employee’s pay is earned. Payroll costs incurred but not paid during the Borrower’s last pay period of the Covered Period (or Alternative Payroll Covered Period) are eligible for forgiveness if paid on or before the next regular payroll date. Otherwise, payroll costs must be paid during the Covered Period (or Alternative Payroll Covered Period). For each individual employee, the total amount of cash compensation eligible for forgiveness may not exceed an annual salary of $100,000, as prorated for the Covered Period. Count payroll costs that were both paid and incurred only once. For information on what qualifies as payroll costs, see Interim Final Rule on Paycheck Protection Program posted on April 2, 2020 (85 FR 20811) (as amended by the Revisions to First Interim Final Rule, posted on June 11, 2020). Include only payroll costs for employees whose principal place of residence is in the United States.

  • Q: What are Eligible Non Payroll Costs?

    A: Nonpayroll costs eligible for forgiveness consist of:

    • Covered mortgage obligations: payments of mortgage interest (not including any prepayment or payment of principal) on any business mortgage obligation on real or personal property incurred before February 15, 2020 (“business mortgage interest payments”);
    • Covered rent obligations: business rent or lease payments pursuant to lease agreements for real or personal property in force before February 15, 2020 (“business rent or lease payments”); and
    • Covered utility payments: business payments for a service for the distribution of electricity, gas, water, telephone, transportation, or internet access for which service began before February 15, 2020 (“business utility payments”).

    An eligible nonpayroll cost must be paid during the Covered Period or incurred during the Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period. Eligible nonpayroll costs cannot exceed 40% of the total forgiveness amount. Count nonpayroll costs that were both paid and incurred only once.

  • Q. What circumstances are included in the total number of employee reduction exceptions in Table 1 of Schedule A?

    A. The following should be supported with documentation: 

    1. Good faith offer made and declined by past employee at same pay
    2. Employee requests reduced schedule 
    3. Fired for cause 
    4. Employee resigns 
    5. Employee voluntarily retires 
  • Q. How do I convert Headcount to FTE for purposes of the PPP Forgiveness Application?

    Employees (non-owners) who work 40 hours per week = 1 FTE
    Employees (non-owners) who work <40 hours per week - .50

    Alternatively, you may average the hours paid per week, divide by 40, and round to the nearest tenth.
    For example, a 30 hour per week employee would be 30/40 -.75 – round to nearest tenth - .80 versus the .50 in the simplified calculation.

  • Q: What are the Covered Periods?

    A: Covered Period: The Covered Period is either (1) the 24-week (168-day) period beginning on the PPP Loan Disbursement Date, or (2) if the Borrower received its PPP loan before June 5, 2020, the Borrower may elect to use an eight-week (56-day) Covered Period. For example, if the Borrower is using a 24-week Covered Period and received its PPP loan proceeds on Monday, April 20, the first day of the Covered Period is April 20 and the last day of the Covered Period is Sunday, October 4. In no event may the Covered Period extend beyond December 31, 2020. 

  • Q: Am I Eligible for the 3508 EZ Form?

    A: You (the Borrower) can apply for forgiveness of your Paycheck Protection Program (PPP) loan using this SBA Form 3508EZ if you meet at least one of the three following conditions: 

    1. The Borrower is a self-employed individual, independent contractor, or sole proprietor who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form (SBA Form 2483). 
    2. The Borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period (as defined below) compared to the period between January 1, 2020 and March 31, 2020 (for purposes of this statement, “employees” means only those employees that did not receive, during any single period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000);
      AND 
      The Borrower did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period. (Ignore reductions that arose from an inability to rehire individuals who were employees on February 15, 2020 if the Borrower was unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020. Also ignore reductions in an employee’s hours that the Borrower offered to restore and the employee refused. See 85 FR 33004, 33007 (June 1, 2020) for more details. 
    3. The Borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period (as defined below) compared to the period between January 1, 2020 and March 31, 2020 (for purposes of this statement, “employees” means only those employees that did not receive, during any single period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000); 
      AND 
      The Borrower was unable to operate during the Covered Period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19. 

SBA Forgiveness Guidance and Resources

  • SBA Guidance on PPP Loan Forgiveness - August 13, 2020

    SBA Guidance on PPP Loan Forgiveness - August 13, 2020

    On August 11, the Small Business Administration (SBA), in consultation with the Department of the Treasury, provided guidance to address borrower and lender questions concerning forgiveness of Paycheck Protection Program (PPP) loans. The complete SBA FAQ document can be found here.

  • SBA Guidance on PPP Loan Forgiveness - August 5, 2020

    SBA Guidance on PPP Loan Forgiveness - August 5, 2020

    On August 4, the Small Business Administration (SBA), in consultation with the Department of the Treasury, provided guidance to address borrower and lender questions concerning forgiveness of Paycheck Protection Program (PPP) loans. The complete SBA FAQ document can be found here.

  • Small Business Administration (SBA) Releases PPP Loan Information - July 7, 2020

    Small Business Administration (SBA) Releases PPP Loan Information - July 7, 2020 

    On July 6, the SBA chose to release PPP loan information at the request of Congress, the media and others given the significant taxpayer commitment to the program. This was not a decision made by Bank of Blue Valley or any other bank that participated in the government program.

    Not all details about individual PPP loans are being released by the SBA.

    • Names of borrowers with a PPP loan under $150,000 will not be identified at this time. For loans under $150,000, only the city, state, zip code, the number of employees benefited, and the congressional district will be identified, along with the name of the lender that made the loan.
    • For PPP loans over $150,000, the SBA released the name of the business along with the information above. The SBA released a dollar range for these loans, not the exact amounts.

    PPP Loan Forgiveness
    As of July 6, the SBA has not begun to accept applications for forgiveness. Bank of Blue Valley has not received any information from the SBA on when they will begin to accept applications for forgiveness. We will closely monitor SBA announcements and communicate updates in a timely fashion. Customers should not fill out or submit SBA PPP forgiveness applications to Bank of Blue Valley. We will be providing customers an online tool and calculator to assist in completion of the PPP forgiveness application.

    Extension of the PPP Loan Program through August 8, 2020
    On July 4, President Trump signed the PPP Extension Bill to allow small businesses to apply for the loans through August 8. The program was expected to end on June 30; however, it is reported that approximately $130 billion of the $670 billion remained in the program.

    Bank of Blue Valley will continue to support you and our other business customers as we do our part to help fuel the economic recovery in our community. We are here to help and answer any questions you may have about PPP or our other small business programs.

  • Paycheck Protection Program Flexibility Act Guidance Published - June 10, 2020

    Paycheck Protection Program Flexibility Act Guidance Published - June 10, 2020 

    On June 10, 2020, the SBA and US Treasury publish guidance for Paycheck Protection Program Flexibility Act. Read the Interim Final Rule.

  • Paycheck Protection Program Flexibility Act Becomes Law - June 5, 2020 

    Paycheck Protection Program Flexibility Act Becomes Law - June 5, 2020 

    On June 5, 2020, the Paycheck Protection Program Flexibility Act was signed by President Trump and became law. Here’s a link to the Paycheck Protection Program Flexibility Act.

  • Interim Final Rule on Loan Review Procedures and Related Borrower and Lender Responsibilities - May 22, 2020

  • Interim Final Rule on Loan Forgiveness - May 22, 2020

    On Friday, May 22, 2020, The U.S Treasury Department and the SBA issued the Interim Final Rule for PPP Loan Forgiveness.

  • Paycheck Protection Program Loan Forgiveness Application - May 15, 2020

    Paycheck Protection Program Loan Forgiveness Application - May 15, 2020 

    On May 15, 2020 the SBA published a PPP Loan Forgiveness Application and instructions.

    PLEASE DO NOT COMPLETE AND SUBMIT THIS APPLICATION AT THIS TIME.

    Bank of Blue Valley is providing this as a further guide regarding forgiveness during the period between now and when you may apply for forgiveness

    Bank of Blue Valley will provide an online application and calculator tool for submitting and processing forgiveness applications.

Frequently Asked Questions on the Paycheck Protection Program

  • Q: Who could apply for a PPP Loan?

    A: All businesses – including nonprofits, veteran’s 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 details.

  • Q: How long will this program last?

    A: Although the program is (as of June 5th) open until December 31, 2020, we encourage our customers to apply as quickly as possible because there is currently a funding cap and lenders need time to process the loans.

  • Q: How many loans can customers take out under this program?

    A: Only one per business that they own and operate.

  • Q: Do customers need to personally guarantee this loan?

    A: 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 the borrower.***

  • Q: For what can customers use these loans?

    • Payroll costs, including benefits
    • Interest on mortgage obligations in force before February 15, 2020
    • Rent, under lease agreements in force before February 15, 2020; and
    • Utilities, for which service began before February 15, 2020
  • Q: What counts as payroll costs?

    • 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.
       
  • Q: What time period should borrowers use to determine their number of employees and payroll costs to calculate their maximum loan amounts?

    A: In general, borrowers can calculate their aggregate payroll costs using data either from the previous 12 months or from calendar year 2019.

    For seasonal businesses, the applicant may use average monthly payroll for the period between February 15, 2019, or March 1, 2019, and June 30, 2019. An applicant that was not in business from February 15, 2019, to June 30, 2019, may use the average monthly payroll costs for the period January 1, 2020, through February 29, 2020.

  • Q: The CARES Act excludes from the definition of payroll costs any employee compensation in excess of an annual salary of $100,000. Does that exclusion apply to all employee benefits of monetary value?

    A: No. The exclusion of compensation in excess of $100,000 annually applies only to cash compensation, not to non-cash benefits.

  • Q: Do PPP loans cover paid sick leave?

    A: Yes. PPP loans covers payroll costs, including costs for employee vacation, parental, family, medical, and sick leave. However, the CARES Act 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 (Public Law 116–127). Learn more about the Paid Sick Leave Refundable Credit here.

  • Q: Should payments that an eligible borrower made to an independent contractor or sole proprietor be included in calculations of payroll costs?

    A: No. Any amounts that an eligible borrower has paid to an independent contractor or sole proprietor should be excluded from the eligible business’s payroll costs. However, an independent contractor or sole proprietor will itself be eligible for a loan under the PPP, if it satisfies the applicable requirements.

  • Q: How large can the loan be?

    A: Loans can be for up to 2.5x the applicant’s average monthly payroll costs from the last year. That amount is subject to a $10 million cap.

  • Q: What is the interest rate?

    A: 1.00% fixed rate.

  • Q: When do customers need to start paying interest on their loan?

    A: All payments are deferred for 10 months from the point at which the forgiven amount is determined; however, interest will continue to accrue over this period.

  • Q: Can customers pay their loan earlier than the two- to five-year maturity date?

    A: Yes. There are no prepayment penalties or fees.

  • Q: Do customers need to pledge any collateral for these loans?

    A: No. No collateral is required.

  • Q: What additional criteria does the customer’s loan need to meet?

    A: As part of the application, borrowers need to certify in good faith that: 

    • Current economic uncertainty makes the loan necessary to support the ongoing operations of the Applicant
    • The funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments. Applicant understands that if the funds are used for unauthorized purposes, the federal government may pursue criminal fraud charges.
    • Documentation verifying the number of full-time equivalent employees on payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight-week period following this loan will be provided to the lender.
    • 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 40% of the forgiven amount may be for non-payroll costs.
    • During the period beginning on February 15, 2020, and ending on December 31, 2020, the Applicant has not and will not receive another loan under this program.
    • Applicant further certifies that the information provided in this application and in all supporting documents and forms is true and accurate. Applicant realizes that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable by law.
    • Applicant acknowledges that the lender will calculate the eligible loan amount using the tax documents that the Applicant has submitted. Applicant affirms that these tax documents are identical to those submitted to the IRS. Applicant also understands, acknowledges, and agrees 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 compliance with SBA Loan Program Requirements and all SBA reviews.
    • Applicant acknowledges that the bank provided the forms and necessary information to complete the Paycheck Protection Program Application. By filing an application with the bank, the applicant further certifies that no agent (attorney, accountant, consultant, etc.) was utilized in the completion of the application. Applicant further acknowledges and agrees that the bank will not process any application or close any loans if an agent seeking payment for services has been utilized and that applicant will inform any persons consulted with regarding the application of this requirement.
  • Q: What do borrowers need to certify?

    A: As part of the application, borrowers 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. Borrowers have not and will not receive another loan under this program. Borrowers 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 to 24 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 40% of the forgiven amount may be for non-payroll costs. All the information that the borrower provided in the 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. Borrowers acknowledge that the lender will calculate the eligible loan amount using the tax documents they submitted. Borrowers affirm that the tax documents are identical to those they submitted to the IRS. And borrowers 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 compliance with SBA Loan Program Requirements and all SBA reviews.

  • Q: Where can customers find more information?

    A: Customers can find the official SBA “PPP Frequently Asked Questions” here. The SBA makes regular updates to their guidance and the referenced FAQ. This lending institution is providing a basic version of the FAQ for ease of use on behalf of the borrower. If there is any discrepancy between the information found on this lending institution’s FAQ and the SBA FAQ, the SBA document should be taken as the source of truth.

To view the full FAQ sheet provided by the SBA, in consultation with the Department of the Treasury, click here.


More information can be found on the U.S. Chamber of Commerce Coronavirus Resources site with a Small Business Guide and Checklist.

 


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