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COVID-19 Updates including Paycheck Protection Program forgiveness updates: Learn more.

Paycheck Protection Program FAQ

View FAQs specific to PPP forgiveness and review our supporting documentation resource page for the forgiveness process.

 

 

What is the Paycheck Protection Program?

This program is for any small business with less than 500 employees (subject to limited exceptions) including sole proprietors independent contractors and self-employed persons), 501(c)(3) non-profit organization, 501(c)(19) veterans organization and Tribal businesses affected by coronavirus/COVID-19.

Businesses in certain industries with more than 500 employees may be eligible if they meet the SBA’s size standards for those industries and more than one business location may be eligible.

The business must be at least owned 51% by individuals who are U.S. citizens and/or who have Lawful Permanent Resident (LPR) status, whose status can be verified through USCIS, and will control the management/daily operations of the business  .

Program loans are eligible for forgiveness, in part or in full. The Small Business Administration’s Credit Elsewhere requirements do not apply.

What can I use these loans for?

Loan proceeds use is limited to coverage of payroll expenses, group health care benefits, utilities, rent, mortgage interest payments and interest on debt incurred prior to February 15, 2020. 

How large can my loan be?

Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount not to exceed $10 million. If you are a seasonal or new business, you will use different applicable time periods for your calculation using a calculation worksheet. Payroll costs will be capped at $100,000 annualized for each employee.

Can I apply for a loan under $5,000?

Yes, applications can be accepted no matter what the minimum amount is, as long as it's not more than the amount qualified for using your payroll calculation.

Where can I apply for the Paycheck Protection Program?

We are processing Paycheck Protection Program applications received by April 15, 2020 and are no longer accepting new applications. This will allow us to be relentlessly focused on the customer applications that we have in process. 

How do I check on the status of my application?

To check on the status of your existing application, please contact your banker or call us at 800.711.2265.

What are the loan details?

Updated June 5, 2020:

This unsecured loan has a maturity of 2 years (if closed prior to June 5, 2020) or 5 years (if closed on or after June 5, 2020) and an interest rate of 1.00%. You will not be charged participation or pre-payment fees. Loan payments will be deferred until the earlier of the date that your forgiveness amount is remitted or 10 months after your covered period (which may be 8 weeks or 24 weeks following disbursement of your loan).  No collateral or personal guarantees are required. 

How do I calculate the maximum amount I can borrow?

The following methodology should be used to calculate the maximum amount that can be borrowed if you are self-employed and have no employees, and your principal place of residence is in the United States, including if you are an independent contractor or operate a sole proprietorship (but not if you are a partner in a partnership):

  • Step 1: Find your 2019 IRS Form 1040 Schedule C line 31 net profit amount (if you have not yet filed a 2019 return, fill it out and compute the value). If this amount is over $100,000, reduce it to $100,000. If this amount is zero or less, you are not eligible for a PPP loan.
  • Step 2: Calculate the average monthly net profit amount (divide the amount from Step 1 by 12).
  • Step 3: Multiply the average monthly net profit amount from Step 2 by 2.5.
  • Step 4: Add the outstanding amount of any Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you seek to refinance, less the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid).

Your 2019 IRS Form 1040 Schedule C must be provided to substantiate the applied-for PPP loan amount. You must also provide a 2019 IRS Form 1099-MISC detailing nonemployee compensation received (box 7), invoice, bank statement, or book of record establishing you were self-employed in 2019 and a 2020 invoice, bank statement, or book of record establishing you were in operation on February 15, 2020.

The following methodology should be used to calculate the maximum amount that can be borrowed if you are self-employed with employees, including if you are an independent contractor or operate a sole proprietorship (but not if you are a partner in a partnership):

  • Step 1: Compute your 2019 payroll costs by adding the following:
    • 2019 IRS Form 1040 Schedule C line 31 net profit amount (if you have not yet filed a 2019 return, fill it out and compute the value); if this amount is over $100,000, reduce it to $100,000; and if this amount is less than zero, set this amount at zero;
    • 2019 gross wages and tips paid to your employees whose principal place of residence is in the United States, which can be computed using 2019 IRS Form 941 Taxable Medicare wages & tips (line 5c-column 1) from each quarter plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips, subtracting any amount paid to any individual employee in excess of $100,000 and any amounts paid to any employee whose principal place of residence is outside the U.S;2019 employer contributions for employee health insurance (portion of IRS Form 1040 Schedule C line 14 attributable to health insurance);
    • 2019 employer contributions to employee retirement plans (IRS Form 1040 Schedule C line 19); and
    • 2019 employer state and local taxes assessed on employee compensation, primarily state unemployment insurance tax (from state quarterly wage reporting forms).
  • Step 2: Calculate the average monthly payroll costs amount (divide the amount from Step 1 by 12).
  • Step 3: Multiply the average monthly payroll costs amount from Step 2 by 2.5.
  • Step 4: Add the outstanding amount of any EIDL made between January 31, 2020 and April 3, 2020 that you seek to refinance, less the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid).

Your 2019 IRS Form 1040 Schedule C, IRS Form 941 and state quarterly wage unemployment insurance tax reporting form from each quarter (or equivalent payroll processor records or IRS Wage and Tax Statements), along with documentation of any retirement or health insurance contributions, must be provided to substantiate the applied-for PPP loan amount. A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish you were in operation and had employees on that date.

What will I certify?

The Business and each 20% or greater owner must certify in good faith to all of the below:

  • Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.
  • The funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments; I understand that if the funds are used for unauthorized purposes, the federal government may pursue criminal fraud charges.
  • Documentation verifying the number of full-time equivalent employees on payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight week period following this loan will be provided to the lender.
  • 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 twenty-five percent (25%) of the forgiven amount may be for non-payroll costs.
  • During the period beginning on February 15, 2020 and ending on December 31, 2020, the Applicant has not and will not receive another loan under this program.
  • I further certify that the information provided in this application and the information that I have provided in all supporting documents and forms is true and accurate. I realize that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable under 18 USC 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to $250,000; under 15 USC 645 by imprisonment of not more than two years and/or a fine of not more than $5,000; and, if submitted to a Federally insured institution, under 18 USC 1014 by imprisonment of not more than thirty years and/or a fine of not more than $1,000,000.
  • I acknowledge that the lender will calculate the eligible loan amount using tax documents I have submitted. I affirm that these tax documents are identical to those I submitted to the IRS. I also understand, acknowledge and agree that the Lender can share the tax information with SBA's authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.

Does the bank cover payment of referral fees to an agent?

First Commonwealth will not pay referral, broker or packaging fees.

How long will it take to process my application?

Due to popularity of the program, we expect it will take up to 2 weeks. Our priority is guiding our established business customers through the process.

How will the funds be dispersed?

Direct deposit or check.

How many quarters of form 941 and 944 do I need to submit?

You will need to provide all 4 quarters of payroll tax returns for 2019.

What if I can’t locate my quarterly payroll tax fillings?

A breakdown of your monthly payroll from January 2019 through February 2020 will be sufficient.

Am I eligible if I didn't file my 2019 income taxes yet?

Yes

Is a 1099 employee counted as a company's expense?

No, since the individual/company that receives the 1099 can apply, this expense is not eligible.