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SBA Paycheck Protection Program – March 2021 UPDATE
We know local businesses are the pillars of economic growth and vitality here in the Hudson Valley. Through our support of those businesses, we can help make the entire area a better place to work and live. With the SBA's new Paycheck Protection Program (PPP), Rhinebeck Bank can again serve as a lending resource to the many small businesses negatively affected by the COVID-19 (Coronavirus) pandemic.
Paycheck Protection Program (PPP) - FAQs (current as of 3/3/21)
PPP Guidance from SBA Administrator Carranza on Accessing Capital for Minority, Underserved, Veteran, and Women-owned Business Concerns
Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act
Interim Final Rule on Second Draw PPP Loans
Here are some highlights of the Paycheck Protection Program:
Who is Eligible for First and Second Draw PPP Loans?
First Draw Loans:
Small businesses that did not receive a PPP loan prior to August 8, 2020 will have the ability to apply for a PPP First Draw Loan on or before March 21, 2021. Businesses will need to prove they were in operation on February 15, 2020, are not permanently closed, and are not excluded based on other eligibility criteria.
Small businesses with 500 or fewer employees—including an expanded list of nonprofits, veterans organizations, self-employed individuals, sole proprietorships, and independent contractors—are eligible for First Draw PPP Loans. Businesses with more than 500 employees are eligible in certain industries.
Please click here for the latest SBA guidance regarding how to calculate your maximum loan amount for a First Draw PPP Loan.
Second Draw Loans:
A borrower is eligible for a Second Draw PPP Loan only if the borrower satisfies all of the following:
Please click here for the latest SBA guidance regarding how to calculate your maximum loan amount for a Second Draw PPP Loan.
Maximum Loan Amounts
First Draw Loans
Unlike PPP Loans made prior to August 8, 2020, new first-time applicants will have the ability to use either 2019 or 2020 when calculating their maximum loan amount. The maximum loan amount remains the lesser of 2.5 times the applicant's average monthly payroll or $10 million. Please click here for the latest SBA guidance regarding how to calculate your maximum loan amount for a First Draw PPP Loan.
Second Draw Loans
Generally, the maximum amount of a Second Draw PPP Loan is the lesser of 2.5 months of the borrower's average monthly payroll cost or $2 million. As part of the loan process, the borrower must certify that they have provided documentation verifying the number of full-time equivalent employees on payroll at the time of application. Please click here for the latest SBA guidance regarding how to calculate your maximum loan amount for a Second Draw PPP Loan.
What documentation is required?
First Draw Loans: Please click here to review the latest SBA guidelines regarding First Draw PPP Loan documentation requirements.
Second Draw Loans: Please click here to review the latest SBA guidelines regarding Second Draw PPP Loan documentation requirements. (IMPORTANT NOTE: If the Borrower applies for a Second Draw PPP Loan using 2019 for the base year for payroll cost calculation AND received the First Draw PPP Loan using 2019 as the base year for payroll costs AND received their First Draw PPP Loan from Rhinebeck Bank, then the Borrower will only be required to submit the proof of reduction in gross receipts outlined above. No additional supporting documentation will be required.)
When to Apply
Rhinebeck Bank and banks of similar sizes are eligible to submit First or Second Draw loans on Tuesday, January 19, 2021.
How to Apply
Please contact us at (845) 454-8555, Option #3 for information regarding PPP application details.
Additional PPP Loan Information
For full details about PPP Loans, please review the Interim Final Rule links referenced above or click here to visit the SBA website.
EIDL Program Update - January 2021
In addition to the Paycheck Protection Program, the SBA has also re-launched the Economic Injury Disaster Loan (EIDL) program, which provides working capital loans for small businesses, small agricultural cooperatives, small aquaculture businesses and most private non-profit organizations. Borrowers must apply directly with the SBA as part of the EIDL program. For more information and the latest EIDL program updates, please click here.
SBA Economic Stimulus Programs - Advisory Message re: Scams & Fraud Schemes
Start Planning to Have Your Loan Forgiven
If your small business has received a Paycheck Protection Program (PPP) loan, there are specific requirements you’ll need to meet in order to have your loan forgiven. We will be continuously updating this page with the information from the SBA, and provide helpful resources for beginning your loan forgiveness process. Please check back frequently to stay informed.
How Do I Have My PPP Loan Forgiven?
U.S Small Business Association- Simpler PPP Loan Forgiveness for Loans $50,000 or Less
U.S. Chamber Guide to PPP Loan Forgiveness
Are You Prepared?
If you are one of the many small businesses who accepted an SBA Paycheck Protection Program loan, and are considering loan forgiveness, the next step is preparation. Loan forgiveness is not automatic. You’ll need to apply and adhere to many requirements.
PPP Loans Forgiveness $50,000 or Less
PPP Loan Forgiveness 3508s Instructions- For Loans Under $50,000
PPP Loan Forgiveness 3508s Applications- For Loans Under $50,000
PPP Loan Forgiveness $50,000 or More
Click here to review our PPP Loan Forgiveness Application Completion Guide.
In accordance with the SBA’s Final Interim Rules on Forgiveness, the SBA has mandated that the following documents must be submitted by each Borrower with its PPP Loan Forgiveness Application:
a. Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees. Reports from a third-party payroll provider are strongly encouraged.
b. Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period:
i. Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
ii. State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.
c. Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to:
a. the average number of FTE employees on payroll per month employed by the Borrower between February 15, 2019 and June 30, 2019;
b. the average number of FTE employees on payroll per month employed by the Borrower between January 1, 2020 and February 29, 2020; or
c. in the case of a seasonal employer, the average number of FTE employees on payroll per month employed by the Borrower between February 15, 2019 and June 30, 2019; between January 1, 2020 and February 29, 2020; or any consecutive twelve-week period between May 1, 2019 and September 15, 2019.
The selected time period must be the same time period selected for purposes of completing PPP Schedule A, line 11. Documents may include payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941) and state quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state. Documents submitted may cover periods longer than the specific time period.
a. Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; or lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments. (applied to Line 2 of SBA Form 3508 or Form 3508EZ)
b. Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments. (applied to Line 3 of SBA Form 3508 or Form 3508EZ)
c. Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments. (applied to Line 4 of SBA Form 3508 or Form 3508EZ)
The following is not required to be submitted, but must be available from Borrower:
What Qualifies for Forgiveness?
Remember, the intended purpose of PPP loans was for small business to keep employees on payroll. Loans may be forgiven if eligible small businesses use the loan proceeds for full-time or part-time wages during the covered period (either 8 or 24 weeks).
Please see the Interim Final Rule on Loan Forgiveness Requirements and Loan Review Procedures for Paycheck Protection Program (PPP) loans as amended by the Economic Aid Act (updated as of 1/19/21) for additional guidelines and requirements.
Additional Resources for PPP Loan Forgiveness
PPP Loan Forgiveness Frequently Asked Questions
USA Patriot Act
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