Understanding The Basics

The Payment Protection Program is designed to provide businesses relief now so they can thrive later.

Loan proceeds may be used for specific qualifying expenses:
✓ Payroll Costs and Benefits
✓ A Portion of Your Mortgage Interest & Rent
✓ Utilities (electricity, gas, water, transportation, telephone, and internet)

Carpenter small business owner working at a work table

Eligibility

A small business that meets the SBA’s size standard of fewer than 500 employees.

  • 501(c)3 Nonprofit
  • Sole Proprietor
  • Independent Contractor
  • Tribal Business Concerns
  • 501(c)(19) Veterans Organization
  • Accommodation & Food Services sector (NAICS 72)
  • Certain industries can exceed 500 employees if they meet applicable SBA employee-based size standards
Corporate man in a shirt and tie using his phone to bank

Loan Terms

Total loan amount can be up to 2.5 times the average monthly payroll annualized costs, not to exceed $10 million.

  • 1% Annual Percentage Rate
  • 5-Year Fixed Term
  • Extended Deferral Period On Principal & Interest Payments
  • 24 Week Covered Period
  • No Collateral Required
  • $100,000 Payroll Costs Capped Per Employee
  • Loans Must Be Processed Prior to June 30, 2020
Garden Center workers talking together among flowers

Forgiveness

Forgiveness can be up to 100% of the loan amount depending on how the money was spent.

  • At least 60% of loan amount must be used on payroll costs.
  • The total amount of non-payroll costs may not exceed more than 40%.
  • Restore full-time equivalent (FTE) employees by 12/31/20.
  • Certified documentation for eligible uses of funds, as well as necessary SBA Administrator documentation, is required.
  • Forgiven debt will not result in taxable income.
Couple Looking at Finances Together

Forgiveness Application Help

Detailed Summary & Step-By-Step Instructions For Borrowers.
✓ Forgiveness Calculation Form
✓ Schedule A Line By Line Instructions
✓ Required Documentation To Submit & Maintain

See Instructions

Spending Loan Proceeds


✓ 60% on payroll costs, including benefits
✓ 40% on rent, mortgage payments, utilities, and interest on loans
✓ Covered period extended to 24 weeks

Two New PPP Forgiveness Applications

Both applications give borrowers the option of using the original 8-week covered period (if their loan was made before June 5, 2020) or an extended 24-week covered period.

Woman looking at laptop screen and taking notes on report

EZ Version

PPP Loan Forgiveness Application

Requires fewer calculations and less documentation. Applies to eligible borrowers that:

  • DID NOT reduce the salaries or wages of their employees by more than 25%, and DID NOT reduce the number or hours of their employees; OR
  • Experienced reductions in business activity as a result of health directives related to COVID-19, and DID NOT reduce the salaries or wages of their employees by more than 25%; OR
  • Are self-employed and have no employees
View EZ Application
Business Owner Reviewing Books at Office

Full Version

PPP Loan Forgiveness Application

  • The dollar amount requested for forgiveness includes adjustments due to decreases in the number of full-time equivalent employees and salary/hourly wage reductions;
  • Unable to operate between 2/15/20 and the end of the Covered Period at the same level of business activity as before 2/15/20 as a result of health directives related to COVID-19 issued between 3/1/20 and 12/31/20;
  • Unsure of EZ application eligibility or want to examine full application including the Schedule A Worksheet
View Full Application

Business Reopening Guidance

Guidelines and Timelines Per State

  • 501(c)3 Nonprofit
  • Sole Proprietor
  • Independent Contractor
  • Tribal Business Concerns
  • 501(c)(19) Veterans Organization
  • Accommodation & Food Services sector (NAICS 72)
  • Certain industries can exceed 500 employees if they meet applicable SBA employee-based size standards
View Guidance

U.S. Chamber of Commerce

Updated PPP Loan Forgiveness Guide

  • 1% Annual Percentage Rate
  • 5-Year Fixed Term
  • Extended Deferral Period On Principal & Interest Payments
  • 24 Week Covered Period
  • No Collateral Required
  • $100,000 Payroll Costs Capped Per Employee
  • Loans Must Be Processed Prior to June 30, 2020
Show Me

H.R.7010

Paycheck Protection Program Flexibility Act of 2020

  • At least 60% of loan amount must be used on payroll costs.
  • The total amount of non-payroll costs may not exceed more than 40%.
  • Restore full-time equivalent (FTE) employees by 12/31/20.
  • Certified documentation for eligible uses of funds, as well as necessary SBA Administrator documentation, is required.
  • Forgiven debt will not result in taxable income.
See Amendments

Paycheck Protection Program Overtime

The Beginning (3/27/20) – The Coronavirus Aid, Relief, and Economic Security (CARES) Act, a historic $2 trillion stimulus plan, was signed into law on Friday, March 27, 2020. Title 1 of the CARES Act is the Keeping American Workers Paid and Employed Act which includes the Paycheck Protection Program (PPP), an emergency lending provision that provides relief for small businesses and their employees who have been negatively impacted by the outbreak of COVID-19. This legislation is administered by the Small Business Administration (SBA) under its 7(a) lending program with support from the Department of the Treasury, to provide small business loans on favorable terms to borrowers impacted by the current state of economic uncertainty. 

Round One (4/3/20) – SBA began accepting PPP applications on April 3, 2020. By Thursday, April 16, 2020, the administration announced the $349 billion allotted for the program had maxed out and SBA stopped accepting new applications.

Round Two (4/24/20) – President Trump signed an emergency interim coronavirus relief package which allocated $310b to the Paycheck Protection Program (PPP) into law on Friday, April 24, 2020.

Forgiveness Update (6/5/20) – The Paycheck Protection Program Flexibility Act (PPPFA) of 2020 was signed into law by President Trump on June 5, 2020. This Act amends the Paycheck Protection Program to give borrowers more flexibility and guidance on how and when loan funds are spent while maintaining the possibility for forgiveness.

Revised Application (6/17/20) – The U.S. Small Business Administration, in consultation with the Department of the Treasury, published a revised, borrower-friendly PPP loan forgiveness application implementing the PPPFA amendments. View Press Release.

Real Numbers Making A Real Impact for Local Small Businesses

$5.9m

Dollar Amount Lent in PPP Loans

243

Small Business We Helped Get A PPP Loan

Frequently Asked Questions

What Costs Are Eligible for Forgiveness?

(1) Payroll costs
(2) Interest payments on any business mortgage obligation on real or personal property that was incurred before February 15, 2020 (but not any prepayment or payment of principal);
(3) Payments on business rent obligations on real or personal property under a lease agreement in force before February 15, 2020; and
(4) Business utility payments for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020.

What Counts As Payroll Costs?

Payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees; and for an independent contractor or sole proprietor, wage, commissions, income, or net earnings from self-employment or similar compensation.

Loan Forgiveness Process

What is the general process to obtain loan forgiveness?

Once we have the Loan Forgiveness Application available, a borrower must complete and submit the Loan Forgiveness Application to us. As a general matter, we will review the application and make an initial decision regarding loan forgiveness. If our initial decision determines that the borrower is entitled to forgiveness of some or all of the amount applied for under the statute and applicable regulations, we will submit to SBA. SBA will review the loan or loan application for final approval. If only a portion of the loan is forgiven, or if the forgiveness request is denied, any remaining balance due on the loan must be repaid by the borrower on or before the five-year maturity of the loan. The general loan forgiveness process described above applies only to loan forgiveness applications that are not reviewed by SBA prior to the lender’s decision on the forgiveness application. In a separate interim final rule on SBA Loan Review Procedures and Related Borrower and Lender Responsibilities, SBA will describe its procedures for reviewing PPP loan applications and loan forgiveness applications.

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 likely high subscription, 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.

How Do 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 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. Once the borrower submitted the request, the lender must make a decision on the forgiveness within 60 days.

How Much Of My Loan Will Be Forgiven?

You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 24 weeks after getting the loan. Not more than 40% of the forgiven amount may be for non-payroll costs.

Paycheck Protection Program Loans are subject to to SBA eligibility guidelines, credit approval and program guidelines. Benefits and requirements are not finalized. This is not a complete description of all eligibility requirements. Additional program restrictions may apply. Tulsa FCU eligibility and membership required. Financing maximums and terms are determined by borrower qualifications and use of funds. Tulsa FCU does not provide tax advice. Consult an advisor regarding a particular financial situation.

All SBA PPP loan payments are deferred for 6 months; however, interest will continue to accrue over this period.

“Loan Forgiveness” is not a grant. A portion of the PPP loan that may be forgiven if the borrower provides the required evidence of eligible costs paid over an 8-week period following loan origination. These “eligible costs” include but are not limited to, payroll costs, rent, and mortgage interest payment, utilities (electricity, gas, water, transportation, and telephone or internet access). Certain actions may reduce the amount of forgiveness, such as reducing the number of employees or reducing employee salaries or wages. Documentation of your “eligible costs” and documents that verify the number of full-time equivalent employees and pay rates are required. You must certify that the documents are true.