SBA Paycheck Protection Program Update
Additional guidance has been released on the application process for the new Paycheck Protection Program through the Small Business Administration. By way of quick review, the Paycheck Protection Program provides potentially forgivable loans to small businesses in order to maintain current levels of payroll and to assist in covering the overhead of the business, such as rent and utilities, for an eight-week period. Banks continue to receive guidance from the government on what is needed, but the information listed below will assist you in preparing to apply for a loan once the application window opens for you:
- April 3, 2020, small businesses and sole proprietorships can begin applying
- April 10, independent contractors and self-employed individuals can begin applying
Apply as quickly as possible, as there is a funding cap.
Most banks and credit unions will be servicing these loans for the SBA and will need to verify documentation when you apply for the loan. You should contact your local lender to ensure that they are participating as well as to request what information they require. If your bank is not participating, or you need any assistance with your loan, please let us know.
The SBA will oversee the administration of these loans and has a website dedicated to the Paycheck Protection Program that you can access
here
. The Department of the Treasury also provides some information for small businesses
here
.
The application can be found by following
this link
, although they cannot be submitted until the window opens and only through a bank.
As a reminder, you can apply for a loan of up to 2.5 times your average "payroll costs" for the preceding 12 months (April 1, 2019 through March 31, 2020). Payroll costs include wages, unemployment taxes, health insurance and retirement benefits, but are capped at an annualized $100,000 for each employee earning over $100,000.
We have heard from a few banks on the information they will require to be sent in along with the standard application. Because each bank could have slightly different requirements, please be sure to contact your bank directly for a list of info they will need.
- 2018 (or 2019 if done) income tax returns
- 2019 IRS Quarterly 940, 941, or 944 payroll tax reports, as well as state unemployment returns
- 2019 year-to-date payroll register, as well as 2020 year to date register through March 31 (note that some payroll companies are already offering a link to the reports needed to apply for this loan, if you have electronic access to your payroll account)
- 1099s received for 2019 if you are an independent contractor
- Monthly group health insurance premium invoices for all of 2019 and January through March 2020.
- Include all employees and the company owners
- 2019 profit sharing reports from your third-party administrator that document all retirement funding (does not include the funding that came from employees out of their paycheck deferrals).
- Include all employees and the company owners
- Include 401K plans, Simple IRA, SEP IRAs
Please feel free to let us know if you need any assistance with the gathering of information or the loan application itself. We will work with you to ensure that you have what you need.
As always, if you have any questions, please feel free to reach out and we are happy to assist in any way we can.
