Paycheck Protection Program

The SBA is no longer accepting applications for Paycheck Protection loans, as the funding allocated by the federal government has been exhausted.

Summary Features of the SBA Paycheck Protection Program (PPP)

  1. Interest Rate fixed at 1.00%
  2. 5 Year loan term
  3. No payments for the first 16 months
  4. No fees for Borrower
  5. The loan may be fully or partially forgivable after 8-week or 24-week compliance period if the requirements are met by the borrower

Loan proceeds should be for:

  • Payroll cost, including benefits;
    • 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 (not federal) 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.
  • 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.

How much of my loan may 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-week or 24-week compliance period 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 December 31, 2020, to restore your full-time employment and salary levels for any changes made between February 15, 2020, and the time you apply for PPP.

To learn more or complete the Payroll Protection Forgiveness application, please visit Paycheck Protection Program Forgiveness.

Start Preparing Now

We recommend you work with your bookkeeper, CPA, or internal financial staff to begin collecting the following documentation to support your application:

  • Payroll reports for 2019 and 2020 year-to-date showing the following by employee and/or officers: Gross wages Paid time off Paid vacationPay for family medical leave State and local taxes (form 940, 941, or 944) 1099s for independent contractors (if applicable)
  • Health insurance premiums paid by the employer under a group health plan
  • Sum of retirement plan funding contributed by the employer (included 401K plans, Simple IRA & SEP IRAs)

Wood & Huston Bank and its subsidiaries are not tax or legal advisors. Please consult your tax or legal advisors for more information regarding your personal situation. We have no such agency relationships with CPAs, tax, or legal advisors.

Date Last Updated: August 11, 2020