Paycheck Protection Program (PPP) Loan Guidance

Apr 2, 2020

Guidance for the Paycheck Protection Program (PPP) loan as we know them today:

National Bank of Commerce welcomes you to apply now for your CARES Act Paycheck Protection Program (PPP) loan. Our team of loan officers and SBA specialists are prepared to assist your business. We are experienced Preferred SBA lenders, designated by the Small Business Administration as a top lender. The Preferred SBA lender designation creates a borrowing process that expedites loan approvals.

What we know now about the SBA Payroll Protection Program (PPP):

Who is eligible?

PPP loans are available to small businesses, certain nonprofit organizations, veteran’s organizations or tribal business concerns with fewer than 500 employees or the NAICS size standard for that industry (whichever is greater).

Maximum Loan Amount: 2.5x average monthly payroll costs or $10 million, whichever is less

Small Businesses will use their previous 12-month payroll costs to determine an average monthly payroll cost.
Sole proprietors or independent contractors will use the sum of payments that is a wage, commission, income, net earnings from self-employment, or similar and that is not more than $100,000 in 1 year.
If the business is determined to be a seasonal employer by the administrator, the average total monthly payments for payroll shall be for the 12-week period beginning February 15, 2019, or at the election of the eligible recipient, beginning March 1, 2019 and ending June 30, 2019.
Businesses not in operation in 2019 will use average monthly payroll from January 1, 2020 – February 29, 2020.

Eligible Payroll Costs Includes:

Salary, wages, commission, or similar compensation
Payment of cash tip or equivalent
Payment for vacation, parental, family, medical or sick leave
Allowance for dismissal or separation
Payment for group health care benefits, including insurance premiums
Payment of any retirement benefit
Payment of State or Local tax accessed on the compensation of employees

Eligible Costs Exclude:

Compensation for any employee in excess of an annual salary over $100k, prorated for the covered period. Note: you can include their compensation up to a $100k cap
Taxes imposed or withheld under chapters 21, 22, or 24 of IRS Code during the covered period
Compensation for any employee whose principal residence is outside USA
Qualified sick and/or family leave wages, for which a credit is allowed under Families First Coronavirus Response Act

There is a portion of the CARES Act that has “Loan Forgiveness”. This is not a grant, but there is a portion of the loan that can be forgiven. In order to receive loan forgiveness, the borrower will be required to provide evidence of eligible costs paid over an 8-week period following loan origination. Our team will assist you in filing the needed report/application to request this forgiveness that will be applied to the loan balance, once received from the Treasury. These “eligible costs” include payroll costs, rent, and mortgage interest payment, utilities (electricity, gas, water, transportation, and telephone or internet access). Please know, correct documentation of your eligible cost are necessary to receive any loan forgiveness.

Our team is ready to work with you to get the loans processed to help your business as soon as possible.