PPP Loan Information

Stayed tuned for information from the SBA on the PPP Loan Forgiveness process.

PPP Loan Information

The SBA has extended the time frame for businesses to apply for PPP Loans. 

Please fill out the PPP Loan Application and submit via email to: businessServices@tidemarkfcu.org

 

PPP Loan Forgiveness

The SBA has not yet provided Lenders with a method to submit PPP Forgiveness Applications to them.  In the meantime, we are in the process of building a portal where you will able to submit applications electronically and securely. 

Please do not email applications to us, it’s not secure and doesn’t provide a means for us to track them. 

As soon as the Portal is available and SBA is able to accept applications, we will email you to let you know. 

Thank you for your patience. 

Dear Member,
 
The Small Business Administration (SBA) has updated its PPP Loan Forgiveness guidelines. Please review the information below carefully. 
 
Forgiveness
The SBA issued guidance late last week on the recent changes to the PPP Forgiveness rules. Changes in the rules are as follows:
  • Small businesses now have up to 24 weeks to use the loans and the deadline for rehiring workers has been extended from June 30 to the end of this year.
  •  The portion of the PPP loan forgivable amount that must be used toward payroll has decreased from 75 percent to 60 percent. The remaining 40% can be used for rent, mortgage interest or utility costs (on obligations in existence as of Feb 15 2020).
 
There are now two applications, the Standard and the EZ. The EZ application requires fewer calculations and less documentation. Both applications allow borrowers to use the original 8-week covered period – if their loan was made before June 5 – or an extended 24-week covered period. Most borrowers will qualify for the EZ application.
 
Use the EZ Application if you meet ONE of the following conditions:
  • You are self-employed and have no employees; or
  • You did not reduce the salaries or wages of your employees by more than 25 percent and did not reduce the number or hours of your employees; or
  • You experienced reductions in business activity as a result of health directives related to the pandemic and did not reduce the salaries or wages of your employees by more than 25 percent.
 
If you do not qualify for the EZ Application, you must use the Standard Application.
 
Examples of Calculations are provided below. Please carefully read the instructions as there are penalties for reductions in employee numbers.
 
PLEASE NOTE THAT IT IS STILL POSSIBLE THAT ADDITIONAL CHANGES WILL BE MADE TO THE PPP FORGIVENESS PROGRAM. IN THE MEANTIME, IF YOU WISH TO SUBMIT USING THE 8-WEEK CALCULATION, YOU MAY START TO SUBMIT 8-WEEKS AFTER YOU RECEIVED YOUR LOAN. IF YOU NEED ADDITIONAL TIME TO USE THE FUNDS, YOU MAY EXTEND THE PERIOD UP TO 24 WEEKS.
Documentation
You are required to submit documentation with your application, essentially the same documentation you submitted for the loan except that it will be for the time-period you selected for forgiveness.
This also applies to the EZ application.
Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or the Alternative Payroll Covered Period consisting of each of the following:
a. Bank account statements or third-party payroll service provider reports documenting the
amount of cash compensation paid to employees.
b. Tax forms (or equivalent third-party payroll service provider reports) for the periods that
overlap with the Covered Period or the Alternative Payroll Covered Period:
i. Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
ii. State quarterly business and individual employee wage reporting and
unemployment insurance tax filings reported, or that will be reported, to the relevant state.
c. 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 (PPP Schedule A, lines (6) and (7)).
 
FTE: Documentation showing (at the election of the Borrower):
 
a. the average number of FTE employees on payroll per week employed by the Borrower
between February 15, 2019 and June 30, 2019;
b. the average number of FTE employees on payroll per week employed by the Borrower
between January 1, 2020 and February 29, 2020; or
c. 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 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 will be reported, to the relevant 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.
a. 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.
b. 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.
c. 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.
 
Owner Compensation Replacement
Owner must use the average net profit used on the original application. Remember that it was limited to $100,000. The SBA has specified the following limits for forgiveness for your compensation replacement depending on which time frame you are using: 
 
Net Profit in 2019 (maximum of $100,000) / 52 weeks x Period Selected (8 -24) = Forgiveness*
 
* Maximum is limited to your average payroll in 2019 x 2.5
 
       Example:
       Assume Net Profit in 2019 was $50,000 and you selected a time frame of 12-weeks
                  $50,000 / 52 weeks x 12 = $11,538.46
                             Limit = $50,000 / 12 = $4,166.67 (Average) x 2.5 = $10,416.67
 
So, in the above example, your limit for forgiveness is $10,416.67 (which would occur after approximately 11 weeks). Note that this will fully use the owner portion of the loan you received.                                                                                                                                                                                
Plus health benefits, retirement contributions, and state unemployment taxes paid during the period you selected that will be reported on your Schedule C.
 
Plus rent, interest, and utility payments that you paid during the selected period that will be reported on your Schedule C (limited to 40% of the loan amount)
 
If you have employees, please see below under Others.
 
Others
For employees, the SBA has specified the following limits for forgiveness depending on which time frame you are using:
 
        8-weeks        $15,385 per employee
       24-weeks        $46,154 per employee
 
Total Employee Payroll (limited to $100,000/year) / 52 x Period Selected (8-24)
 
Plus, health benefits, retirement contributions, and state unemployment taxes paid during the period you selected that will be reported on your Schedule C.
 
Plus, rent, interest, and utility payments that you paid during the selected period that will be reported on your Schedule C.
 
  • Borrowers may seek forgiveness for payroll costs for the eight weeks beginning on either: i.the date of disbursement of the borrower’s PPP loan proceeds from the Lender (i.e., the start of the covered period); or ii. the first day of the first payroll cycle in the covered period (the “alternative payroll covered period”).
Should you require assistance, please email either Ed Horan (ehoran@tidemarkfcu.org) or Casey Hall (chall@tidemarkfcu.org). You can set up an appointment to speak to them if needed.
 
Thank you,
 
The Commercial Lending Team at Tidemark FCU
302-629-0100