•  Paycheck Protection Plan

    As an SBA Preferred lender, BankPlus will provide small business loans through the Paycheck Protection Program (“PPP”). This program authorizes up to $349 billion in potentially forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone.

    This program is designed to provide economic support to businesses by offering loans to enable companies to retain employees and pay eligible operational expenses incurred during the Coronavirus, also known as “COVID-19”, pandemic.

    The PPP eliminates many of the requirements of a typical SBA loan and expands the types of businesses that are eligible for relief. The SBA continues to provide guidance regarding this program. Please check back frequently for updates.


    APPLICATION AND REQUIRED FORMS

     

    Below is a summary of the criteria for loans under this program.

    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 eligible expenses.
    • Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other eligible expenses.

    WHERE CAN I APPLY?
    Click HERE for the SBA application and all required forms.

    WHAT DO I NEED TO APPLY?
    You will need to complete the PPP loan application and submit the application with the required documentation to your BankPlus lender.

    WHAT OTHER DOCUMENTS WILL I NEED TO INCLUDE IN MY APPLICATION?
    You will need to provide your relationship lender eligible payroll costs along with tax documents to validate these costs. Specific requirements will be provided once SBA releases the program guidelines and requirements.

    WHAT CAN I START PREPARING NOW?
    We recommend you begin collecting the following essential documentation to support your application:

    • Payroll reports for 2019 and 2020 year-to-date showing the following by employee and/or officers:
      • Gross wages (capped at $100k/employee)
      • Paid time off
      • Paid vacation
      • Pay for family medical leave
      • State and local taxes (form 940, 941 or 944)
      • 099’s for independent contractors (if applicable)
       
    • Health insurance premiums paid by the employer under a group health plan
    • Payment of any retirement benefit paid by the employer

    WHAT CAN I USE THESE LOANS FOR?
    You should use the proceeds from these loans toward your:

    • Payroll costs, including eligible benefits
    • Interest on mortgage obligations, incurred before February 15, 2020
    • Rent, under lease agreements in force before February 15, 2020
    • 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
    • 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

     

    WHAT IS MY ELIGIBLE LOAN AMOUNT?
    2.5x average monthly payroll costs or $10 million, whichever is less
    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.

    WHO CAN APPLY?
    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 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.

    BUSINESS OPERATIONS
    Covers business operations from 2/15/2020 – 6/30/2020; the loan must be originated by 6/30/2020. Each applicant must provide evidence the business was in operation prior to 2/15/2020.

    FORGIVENESS  

    • The loan can be 100% forgiven if certain qualifications are met
    • Documented expenditures eligible for forgiveness over an eight-week period:
      • Rent
      • Utilities
      • Interest payments on any mortgage obligations or other debt obligations incurred before February 15, 2020 (but not any payments or prepayments of principal)
      • Payroll costs
               

    DO I NEED TO FIRST LOOK FOR OTHER FUNDS BEFORE APPLYING TO THIS PROGRAM?
    No. The SBA is 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.

    HOW MANY LOANS CAN I TAKE OUT UNDER THIS PROGRAM?
    Only one.

    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 relationship 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 relationship lender must make a decision on the forgiveness within 60 days of the request.

    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.
    • 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 the PPP program.
    • You will provide your relationship 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 receiving 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.
    • 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.


      * BankPlus is still waiting on official SBA guidelines and will update as soon as we have them.

    Date Last Updated: April 2, 2020