July 1, 2020 @ 9:00 am

Applications for the Small Business Administration (SBA) Paycheck Protection Program are Now Closed

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We are here to help!

Federated Bank is here to help you apply for a Payment Protection Loan sponsored by the SBA that allows you to access low-interest funding for payroll and other overhead costs. The SBA has notified us that they will start taking applications as soon as their website is updated to handle the increased volumes of loan applications they expect to receive. We urge you to complete your application as soon as possible so we can submit it as soon as the site is open.

What is this program?

The Paycheck Protection Program is one of the stimulus programs provided by the CARES Act approved by the federal government on March 27. The PPP, as it is being called, is a loan program specifically for small business with under 500 employees and other entities with employees such as non-profit organizations.
The primary objective of the program is to provide funding to get your employees back to work.

What are the application dates?

The original application dates are listed below, but because the SBA is scaling up its portal to handle the large number of applications expected, these dates may change. We urge you to pull the required information together and get it to us so we can be ready to submit it for you.
Small businesses and sole proprietors – April 3 through June 30
Independent contractors and self-employed individuals – April 10 through June 30
It will be important to apply early because these loans are first come, first served.

Will I need to meet all the requirements of a typical SBA loan?

No. Most of those provisions are being waived, including the need to provide collateral, personal guarantees, personal or business financial statements and most tax returns. Payroll tax returns will be necessary.

How much of a loan can I get?

The loan amount is calculated as 2.5 x average monthly payroll costs for 2019.

What can I include in my payroll costs?

• Salaries, wages, commissions, tips – all capped at $100,000 annualized per employee
• Benefits such as paid time off, health care premiums paid by you and your contributions to retirement plans
• State and local taxes on payroll costs.

What information will I need to provide?

• Entity formation documents that show you were in operation on February 15, 2020
• Payroll documents showing that you had employees on February 15, 2020
• 2019 federal and state payroll tax forms and financial statements or summaries showing the cost of benefits. If your business is seasonal or you didn’t operate for a full year in 2019, alternative calculations will be used.

How do I know if I’m getting the best rates?

All loan terms will be the same for every borrower.

What are the terms?

• 1.00% interest rate
• 2-year maturity
• No payments for 6 months (interest will accrue during that time).

How do I get all or some of the loan forgiven?

To qualify for the forgiveness provisions, the money you get must be spent within 8 weeks on the following:

• Payroll costs
• Rent or mortgage interest
• Utilities
  AND show that you maintained the size of your staff and payroll at the same levels as your average for 2019.

Are there any specific rules for independent contractors and self-employed individuals?

We expect that guidance for these applicants will be issued the week of April 6. Check back for updates.

Who can I contact if I have any questions?

Please call any of our branch offices and ask for an SBA lender.