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SBA Paycheck Protection Program

We want to provide the following important update regarding the SBA Paycheck Protection Program:

 

Overnight, the SBA issued final rulings on the application process for the Paycheck Protection Program. These rulings contain significant changes to the program, and as such, impact all lenders offering loans under this program. We are working diligently to incorporate these changes into our systems to allow for a seamless application process for our customers to this program. As soon as all of the changes have been implemented in our systems, we will make the necessary updates on our website. You may check our site regularly for any updates, and we will also send an email notification with important updates and information as it becomes available.

 

The SBA is currently working to provide further clarification points, as this is a fluid situation. More detailed information regarding this program can be found on the SBA website.

 

An application form can be found by clicking HERE, however we intend to offer our customers the ability to complete an electronic application once our system is available.


As an SBA approved Lender, PriorityOne Bank will provide small business loans through the Paycheck Protection Program to our customers, which has been established as part of the CARES Act.

We know that the last several weeks have brought about many changes to your business operations, and we are here to help. This program is designed to provide economic support to businesses by offering loans to enable companies to retain employees and pay certain operational expenses incurred during the COVID-19 pandemic.

The Paycheck Protection Program eliminates many of the requirements of a typical SBA loan and expands the types of businesses that are eligible for relief. Below is a summary of the criteria for loans under this program.

We would strongly encourage you to consult with your accountant or CPA to determine your eligibility for this program prior to completing and submitting a loan application.

 

Program Overview

• SBA has announced that applications will begin to be accepted on April 3rd for small businesses and sole proprietorships, and on April 10th for independent contractors and self-employed individuals.

• The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

• Funds are provided in the form of loans that can be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll)

• The Paycheck Protection Program will be available through June 30, 2020

• Loan payments will also be deferred for six months from origination date

 

Loan Amount

Eligible maximum loan amount is capped at the lesser of 2.5 x average payroll costs or $10 million (more information can be found HERE)

 

Payroll costs are calculated as follows:

• Existing business - 2.5 x average monthly payroll costs for 2019, excluding cost over $100,000 on an annualized basis for each employee.

• Less than one year in operation - 2.5 x January 1, 2020 to February 29, 2020 average monthly payroll costs excluding cost over $100,000 on an annualized basis for each employee.

• Seasonal business - 2.5 x average monthly payroll costs incurred during the 12-week period beginning February 15, 2019, and June 30, 2019 excluding cost over $100,000 on an annualized basis for each employee.

• No credit elsewhere test

 

Fees

No fees to the borrower

 

Collateral/Guaranty

No collateral or personal guaranty required

 

Eligibility

Loans under the PPP are available to a wider range of eligible companies than the typical SBA loan:

• Open to for profit and non-profit businesses (non-profit is classified as a 501(c)(3) and 501(c)(19) organization) with less than 500 employees

• If SBA normal size standard under NAICS code allows for greater than 500 employees, the larger company will also be eligible

• Open to self-employed or individual contractors

 

The SBA is currently working to provide further clarification points, as this is a fluid situation. More detailed information regarding this program can be found on the SBA website.

 

An application form can be found by clicking HERE.

 

Please contact a PriorityOne Bank lender near you to learn more about this new loan program.