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Paycheck Protection Program

Paycheck Protection Program

An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. – Second Draw Loan Information

The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan. Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

FULL FORGIVENESS TERMS

Second Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:
• Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan;
• The loan proceeds are spent on payroll costs and other eligible expenses; and
• At least 60 percent of the proceeds are spent on payroll costs.

TO BE ELIGIBLE FOR A PPP SECOND DRAW LOAN, YOUR BUSINESS MUST:

  • Previously received a First Draw PPP Loan and will or has used the full amount only for
    authorized uses;
  • Has no more than 300 employees; and
  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

HOW TO APPLY

You can apply through Citizens Bank of West Virginia by completing the application and submitting the appropriate documentation linked below. The completed application and supporting documentation may be submitted by using the SBA PPP DOCUMENT UPLOAD below or emailed to PPP@citizenswv.com.

THE FOLLOWING SUPPORTING DOCUMENTATION IS REQUIRED WITH A COMPLETED APPLICATION:

PPP Second Draw Borrower Application Form (revised 02-17-21)

PPP First Draw Borrower Application Form (revised 02-17-21)

TOP-LINE OVERVIEWS:

PPP Second Draw Loans
PPP First Draw Loans

Who is eligible to receive a PPP Loan?

Only certain businesses are eligible to receive a PPP loan, and these specifications are different for first-time loan recipients and second-draw recipients.

TO BE ELIGIBLE FOR A FIRST-DRAW PPP LOAN:

  • Your business has 500 or fewer full-time, part-time, or seasonal employees.
  • Your business was operational before February 15, 2020 and remains operational.

TO BE ELIGIBLE FOR A SECOND-DRAW PPP LOAN:

  • Your business has less than 300 full-time, part-time, or seasonal employees; if you have multiple locations, you may not have more than 300 employees per location.
  • You are able to demonstrate a revenue reduction of at least 25% in the first, second, or third quarter of 2020 (when compared with the same quarter in 2019).
  • You have used or will use the full amount of the first draw PPP loan.
  • Your business was operational before February 15, 2020 and remains operational.

BUSINESSES ELIGIBLE FOR FIRST AND SECOND DRAW PPP LOANS INCLUDE:

  • Sole proprietors
  • Independent contractors
  • Self-employed individuals
  • Certain non-profits (the new bill has expanded eligible businesses to include certain 501(c)(6) non-profit organizations)
  • Seasonal employers; the new bill has clarified the definition of these to be businesses that operate no more than seven months within a year or earn no more than a third of gross receipts within a six-month period
  • Faith-based organizations that have less than 150 employees
  • Housing cooperatives that employ less than 300 people

What has changed with round 2 of PPP?

PPP UNDER THE CONSOLIDATED APPROPRIATIONS ACT, 2021 AT-A-GLANCE:

  • $284 billion has been allocated to PPP (including $138 billion of unspent loans from the first round that were reinvested) and the program has been extended to March 31, 2021
  • Second-draw loans are available for businesses with under 300 employees
  • Businesses eligible for PPP loans has been expanded
  • Loan limitations have been expanded for certain businesses
  • Forgiveness for loans under $150K have a new, simplified one-page application
    • While expenses eligible for forgiveness still require a 60/40 split of payroll costs/other eligible expenses, group health insurance benefits are now included in payroll costs (and these entail life insurance, disability benefits, vision, and dental insurance)
  • Eligible expenses for forgiveness have been expanded (for first-draw loans that have not yet been forgiven and for second-draw loans)
  • Borrowers are allowed to choose a covered period that is any period of time between eight and 24 weeks
  • PPP funding includes dedicated set-asides for community lenders (CDFIs and MDIs) and business that operate in low-income areas
  • A clarification has been made indicating that interest rates on PPP loans are non-compounding and non-adjustable 
  • A clarification has been made indicating that forgiven PPP loans are not taxable and forgiven expenses are tax-deductible

What are the PPP loan maximums and limitations?

FIRST-DRAW PPP LOAN LIMITATIONS:

The maximum amount a business that has not yet received a PPP loan can borrow is the lesser of:

  • 2.5 times the average monthly payroll costs and healthcare costs
  • $10 million

There may be exceptions to these limits for restaurants and other hospitality businesses.

 

SECOND-DRAW PPP LOAN LIMITATIONS:

Any business that is applying for a second draw will be subject to more stringent limitations. The maximum second PPP loan amount is the lesser of:

  • 2.5 times the average monthly payroll costs and healthcare costs in the year prior to when the loan was received or within the calendar year
  • 3.5 times the average monthly payroll costs and healthcare costs in the year prior to when the loan was received or within the calendar year for any business that is classified under Code 72 by the North American Industry Classification System (NAICS). (This is a list of hospitality and entertainment businesses like restaurants, hotels, and casinos; click the link to get the full list.)
  • $2 million

What are the requirements for completing the Borrower Application Form (2483-SD)?

Please read carefully page 4 of the application on completing the form.

  • All boxes must be complete unless they do not apply to your business, in which case you should mark the box Not Applicable or NA.
  • All lines/certifications on the application requiring initials must be hand written initials (not typed).   The signature of the authorized representative of the applicant  on the application must be hand written (not typed).
  • If you do not have the PPP First Draw SBA Loan Number available you can leave this box blank and we will enter it for you after the application is submitted to us.
  • NAICS Codes can be looked up at the following website https://www.naics.com/search-naics-codes-by-industry/
  • Business address must be a physical street location (not a P.O. Box).
  • The demographic information form is optional to complete at your discretion.

What documentation must be provided to demonstrate eligibility?

The borrower must submit to the lender the following information to obtain a Second Draw PPP Loan (unless previously submitted in connection with the First Draw PPP Loan).  This information is required even for applicants of $150,000 or less that elect to leave the “Reduction in Gross Receipts of at Least 25%” section of the Borrower Application Form blank.

  1. The completed SBA Form 2483-SD (Second Draw Borrower Application Form).
  2. For Borrowers Not Self-Employed: Form 941 and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever quarter is used to calculate payroll) or equivalent payroll processor records (unless the borrower is self-employed).
  3. For Partnerships: IRS Form 1065 K-1s.
  4. For Self-Employed Borrowers with Employees: Borrower’s 2019 or 2020 IRS Form 1040 Schedule C, Form 941, and state quarterly wage unemployment insurance tax reporting forms from each quarter of 2019 or 2020, or equivalent payroll processor records. A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish the applicant was in operation on February 15, 2020.
  5. For Self-Employed Borrowers without Employees: 2019 or 2020 Form 1040 Schedule C, 2019 or 2020 IRS Form 1099-MISC, document to establish borrower is self-employed (e.g., invoice, bank statement, book of record), and 2020 invoice, bank statement, or book of record to establish that borrower was in operation on or around February 15, 2020.
  6. For All Loans: Documentation sufficient to establish that borrower experienced a reduction in revenue required to be eligible for the Second Draw PPP Loan. This may include relevant tax forms, including annual tax forms, or (if relevant tax forms are not available) a copy of the applicant’s quarterly income statements and/or bank statements with supporting calculations.  In addition, you should provide the calculation performed showing the dollar reduction in Gross Revenues from any calendar quarter of 2019 to the same calendar quarter of 2020, as well as the calculation showing the percentage reduction of 25% or more.
  7. For All Loans: Supporting payroll documentation to demonstrate and confirm the calculation of the dollar amount of average monthly payroll costs for 2019 or 2020 (whichever was used to calculate the eligible loan amount).

If you have already submitted the Second Draw Borrower Application without the above required supporting documentation please provide this additional information at your earliest possible convenience.

PPP LOAN FORGIVENESS

Borrowers may be eligible for loan forgiveness if the funds were used for eligible payroll costs, payments on business mortgage interest payments, rent, or utilities during either the 8- or 24-week period after disbursement.

Funds covering qualified costs may be forgiven if at least 75% of the loan is used toward qualifying payroll costs. Any funds used for non-covered expenses WILL NOT be forgiven.

WHAT COSTS DO NOT MEET PPP LOAN FORGIVENESS REQUIREMENTS?

  • Employee compensation for workers whose main residence is outside of the U.S.
  • Cash compensation for any individual employee in excess of an annual salary of $100,000 (prorated as necessary)
  • Compensation for workers who receive 1099s instead of W-2s
  • Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020 — this includes the employee’s and employer’s share of FICA and Railroad Retirement taxes and income taxes withheld from workers
  • Qualified sick and family leave costs for which credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act

HOW TO APPLY FOR LOAN FORGIVENESS

The SBA recently released the PPP Loan Forgiveness Application, which includes further information and resources to help make sure you qualify. In a nutshell, forgiveness is based on maintaining, or quickly rehiring, employees and salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

The loan forgiveness form and instructions feature several measures to reduce compliance burdens and simplify the forgiveness application process, including:

    • Options for calculating payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles, such as a biweekly or more frequent payroll period (if utilizing an alternative payroll covered period, no supplement payrolls are necessary)
    • Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving the PPP loan
    • Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
    • Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
    • Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined

As more details continue to become available, we will update the information here.

PPP Loan Forgiveness Application & Instructions

PPP LOAN FORGIVENESS EZ APPLICATION

PPP Loan Forgiveness Application – $150,000 or Less

The SBA recently published a new EZ version (Form 3508EZ) of the forgiveness application requiring less documentation and fewer calculations than previously required.

Form 3508EZ applies to borrowers who meet any one of these three criteria:

    • Applied for the PPP loan as self-employed, an independent contractor or a sole proprietor with no employees.
    • Did not reduce salary or wages for any employee by more than 25%, and did not reduce the number or hours of their employees (excepting laid-off employees who refused an offer to return).
    • Did not reduce salary or wages for any employee by more than 25% during the covered period and experienced reductions in business activity as a result of health directives related to COVID-19.

The EZ application requires fewer calculations and less documentation for eligible borrowers.  Details regarding the applicability of these provisions are available in the instructions to the new EZ application form.

If you have already submitted a forgiveness application with the original application you do not need to submit a new application on the revised form.

WHEN SHOULD I SUBMIT MY PPP LOAN FORGIVENESS APPLICATION?

Within a reasonable time following the end of the optional 8 or 24 week time period from your PPP loan origination date.

WHERE CAN I LOCATE MY LENDER PPP LOAN NUMBER AND OTHER LOAN INFORMATION REQUIRED FOR THE FORGIVENESS APPLICATION?

The loan number, date, amount and other information are on the Promissory Note document signed at the PPP loan closing, and in most cases emailed to you after the loan closing. If needed, you may request a copy of your loan documents by emailing PPP@citizenswv.com.

WHERE CAN I LOCATE MY SBA PPP LOAN NUMBER?

Citizens Bank will provide you will your SBA PPP number.  Please email PPP@citizenswv.com to obtain your loan number.

HOW DO I SUBMIT MY PPP LOAN FORGIVENESS APPLICATION?

  • Upload your documents securely below.
  • Securely email your documents to PPP@citizenswv.com.
  • In person at Citizens Bank of West Virginia’s Elkins or Buckhannon offices.
  • Mail to: Citizens Bank of West Virginia; Attn: PPP Loans/Commercial Loans; PO Box 1519, Elkins, WV 26241

WHEN WILL I KNOW IF MY PPP LOAN IS FORGIVEN?

Completed PPP Forgiveness Loan applications and supporting documentations are submitted to the SBA for processing within sixty days.  Applicants will be notified via email regarding the approval status once we have received a response from the SBA.

WHAT IF I NEED ASSISTANCE COMPLETING MY PPP FORGIVENESS APPLICATION?

Please direct your questions to PPP@citizenswv.com and we will be happy to assist you with your application process.

SUPPORTING DOCUMENTS

 

SBA PPP DOCUMENT UPLOAD

SBA PAYCHECK PROTECTION PROGRAM FORM

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