Paycheck Protection Program
The Paycheck Protection Program (PPP) is a forgivable loan program from the Small Business Administration (SBA).
The program is intended to help businesses impacted by COVID-19.
There are multiple ways First Liberty can help you Survive & Thrive during this time of challenge and opportunity. The most immediate, easiest to access and the one with forgiveness of 80% of the proceeds sent to you is the Paycheck Protection Program.
It is designed to help you help your employees, both direct and contract personnel, with your commitment to their well-being and loyalty. And, if you have multiple entities (each with it’s own EIN, etc.) you can submit a separate application for each one.
The attached Paycheck Protection Program Summary sheet gives you a quick overview of the program.
First Liberty has nearly 30 years of experience serving main street businesses with wall street creativity. Whatever your vision is for the future…we can help you with the capital to achieve it.
Expecting great things for you, your employees and our country.
Paycheck Protection Program FAQs
What Do I Need To Certify?
As part of your application, you need to certify in good faith that:
- Current economic uncertainty makes the loan necessary to support your ongoing operations.
- The funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments.
- You have not and will not receive another loan under this program.
- You will provide to the lender documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting this loan.
- Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. Due to the likely high subscriptions, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
- All the information you provided in your application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program is punishable by law.
- You acknowledge that the lender will calculate the eligible loan amount using the tax documents you submitted. You affirm that the tax documents are identical to those you submitted to the IRS. And you also understand, acknowledge, and agree that the lender can share the tax information with the 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.
Do I need to pledge any collateral for these loans?
No. No collateral is required.
When Do I Start Paying Interest On My Loan?
All payments are deferred for 6 months; however, interest will continue to accrue over this period.
What Is My Interest Rate?
1.00% fixed rate.
How Can I Request Loan Forgiveness?
You can submit a request to the lender that is servicing the loan. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on an eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. The lender must make a decision on forgiveness within 60 days.
When Is My Loan Due?
In two years.
How Large Can The 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. That amount is subject to a $10 million cap. If you are a seasonal or new business, you will use different applicable time periods for your calculation. Payroll costs will be capped at $100,000 annualized for each employee.
What Counts As Payroll Costs?
Payroll costs include:
- 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 assessed on compensation
- 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.
What Can I Use These Loans For?
You should use the proceeds from these loans on your:
- Payroll costs, including benefits
- 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 Many Loans Can I Take Out Under This Program?
What Do I Need To Apply?
You will need to complete the Paycheck Protection Program loan application and submit the application with the required documentation to an approved lender that is available to process your application by June 30, 2020.
When Can I Apply?
Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
- Starting April 10, 2020, independent contractors and self-employed individuals can
apply for and receive loans to cover their payroll and other certain expenses through
existing SBA lenders.
- Other regulated lenders will be available to make these loans as soon as they are
approved and enrolled in the program.
Who Can Apply?
All businesses – including nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply. Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries (click HERE for additional detail).
For this program, the SBA’s affiliation standards are waived for small businesses (1) in the hotel and food services industries (click HERE for NAICS code 72 to confirm); or (2) that are franchises in the SBA’s Franchise Directory (click HERE to check); or (3) that receive financial assistance from small business investment companies licensed by the SBA. Additional guidance may be released as appropriate.
Due to the high volume of requests nationwide, and to the fast-moving and evolving nature of the process, we cannot guarantee that you will receive a PPP loan, but will use our best efforts to secure one for you.