How long is the Paycheck Protection program available?
This round of the Paycheck Protection program will be available until March 31, 2021.
Who do I contact at Gesa if I have questions or need assistance?
Who is eligible for a Paycheck Protection loan?
Your business must have been operational as of February 15, 2020. In addition, the following businesses are eligible:
- Small businesses, 501(c)(3) nonprofit, a 501(c)(19) veteran’s organization, or Tribal businesses described in section 31(b)(2)(C) of the Small Business Act with no more than 300 employees (500 NAICS code 72 businesses) , or the applicable size standard for the industry as provided by SBA, if higher.
- Sole-proprietors, independent contractors, and other self-employed individuals, such as S-Corps and LLCs, are eligible for loans.
- Business’s must show a reduction in revenues of 25% or more for the year 2020 or quarter over quarter. For example, Q3 2020 versus Q3 2019.
What is needed to determine eligibility?
- For First Draw PPP Loan Requests: the business must provide verification of payroll expenses, utility expenses, and rental expenses for 2020. These business owners can apply for a PPP loan through 3/31/2021.
- For Second Draw PPP loan Requests: the business must have been in operation as of February 15, 2020 and received a PPP loan during the First Draw rounds and had employees for whom it paid salaries and payroll taxes, or a paid independent contractor. They also need to verify payroll expenses, utility costs, and rental expenses. Typically, quarterly payroll reports from a third-party provider or IRS forms 941 and 943.
What is the amount of loan I can request?
To determine the amount of loan you are eligible for you, take the average eligible monthly payroll costs, excluding compensation above $100,000 in wages, and multiply that figure by 2.5, or 3.5 if your business is in NAICS 72 sectors. The minimum loan amount is $10,000 and the maximum loan amount is $2,000,000.
- First Draw PPP Loans are equal to 2.5 times the monthly average salary expenses.
- First Draw PPP Loans can ask for an increase or ask to use unused PPP Loan amounts.
- Second Draw PPP Loans are equal to 2.5 times, or 3.5 times for NAICS 72 business sector, of their 2020 average monthly payroll expenses. They also have to prove that their revenues from Q1 2020 to Q4 2020 declined by 25% or more compared to 2019, or complete a quarterly test.
*Payroll costs are defined as:
- salaries/wages/commissions, or cash 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 dismissal or separation; payments required for the provision of group health care benefits including insurance premiums; and payment of any retirement benefits, dental, group life insurance, and disability.
- state/local taxes assessed on compensation of employees, 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.
- Farmers must show gross receipts from their schedule F.
What are the allowable uses of the loan?
Allowable uses of the loan include eligible payroll support (eligible employee salaries which excludes compensation above $100,000 in wages, paid sick or medical leave, insurance premiums), interest paid on a mortgage (excludes any prepayment of or payment of principal) or rent, and utility payments. The proceeds have to be used towards a minimum of 60% of payroll costs.
What is the interest rate and fees for a Paycheck Protection loan?
The rate for a Paycheck Protection loan is 1.00% APR and there are no fees.
What is the term of the loan?
The Paycheck Protection loan is a 5-year full payout loan. There will be no prepayment penalty. This program allows for complete deferment of SBA 7(a) Loan payments for at least six (6) months.
Is collateral required?
Paycheck Protection loans are unsecured and no collateral required.
Do Paycheck Protection loans have to be paid back?
The borrower may be eligible for loan forgiveness equal to the amount spent by the borrower during an 8 week or 24 week cover period after the origination date of the loan on eligible payroll costs, interest payments on any mortgage incurred (excludes principal and prepayments), payment of rent on any lease in force, and payment on any utility for which the borrow was expensed during the year. Amounts forgiven may not exceed the principal amount of the loan plus accrued interest.
What documents are required with my application?
In order to apply for a Paycheck Protection loan, the following documents are required:
- Completed application (SBA Form 2483 SD)
- Articles of Incorporation/Organization for each borrowing entity
- By Laws/Operating Agreement for each borrowing entity
- A copy of all owners driver’s licenses
- Payroll expense verification documents to include:
- IRS Form 940, 941, and 943
- Payroll Summary Report with corresponding bank statements
- If a Payroll Summary Report is not available, employee pay stubs (or corresponding period) with corresponding bank statements
- Proof of a reduction in revenues by 25% or more
- Breakdown of payroll benefits, such as vacation, allowance for dismissal, group healthcare benefits, retirement benefits, etc.
- 1099 form (applicable only if you are an independent contractor)
- Certification that all employees live within the United States. If some of your employees live abroad, provide a detailed list with corresponding salaries of all employees outside the United States
- Trailing twelve-month profit and loss statement (as of the date of application) for all applicants
- Most recent mortgage statement, rent statement, or lease
- Most recent utility bills, such as electricity, gas, telephone, internet, or water