The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $349 billion to help small businesses and nonprofits keep workers employed amid the pandemic and economic downturn. This initiative is widely known as the Paycheck Protection Program (PPP) and provides 100% federally guaranteed loans to eligible organizations.
It is important to note that these SBA loans may be forgiven if the borrower maintains payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
You may have a lot of questions about this initiative as details regarding this loan program are being released daily. We’ve compiled a list of questions and answers that you may find helpful.
Who is eligible?
Borrowers with 500 or fewer employees (or a greater number based on the size standard applicable to the industry) may be eligible:
• For-profit businesses of all types, including self-employed individuals, independent contractors, and sole proprietorships
• Nonprofit organizations exempt under Section 501(c)(3)
• Veterans organizations
• Tribal businesses
The Act contains exceptions to standard SBA rules that relax eligibility restrictions for certain covered entities such as businesses in the accommodation and foodservice industry (NAICS 72) that have less than 500 employees per physical location. Other exceptions include franchises assigned a franchise identifier code and businesses licensed under Section 301 of the Small Business Investment Act.
Which type of SBA Loan should I apply for?
Any of our commercial lenders will be happy to help answer that question. Additionally, here is a link to a useful chart, comparing the two loan programs (PPP vs. EIDL).
When can I apply?
Applications can now be submitted through Field & Main Bank. Call any one of our commercial lenders for assistance, we’ve listed their contact information below.
Where can I apply?
You can begin the process by filling out the application, which can be found here. It is a “fillable PDF,” so you can easily type your information into the application. Once the application is fully executed you can then print it, sign it and submit to any of our lenders. Of course, if you have any questions along the way, feel free to reach out to us for guidance.
Are nonprofits eligible?
Most 501(c)(3) nonprofits are eligible if they have less than 500 employees. To be sure, use this link.
Are faith-based organizations eligible?
Yes, the SBA has clarified that faith-based organizations are eligible to receive SBA loans regardless of whether they provide secular social services. Please see the Faith-Based Organizations FAQ from the SBA at this link for additional information.
What types of information are required to apply?
You will need to provide us with the following:
• Completed Application, SBA form 2483
• Documentation of average monthly payroll costs, including benefits, payroll taxes, insurance, vacation, sick leave for the calendar year 2019
• Completed Addendum ‘A’ detailing related business information IF any 20% owner of the borrower has at least a 20% ownership in another business. This form is not required if there are no related businesses. (link to our form here)
How much can I borrow? The maximum loan amount is the lesser of 2.5 times the borrower’s average monthly payroll costs incurred in the one-year period before the loan is made (except for seasonal employers and employers not in business between February 15, 2019, and July 30th, 2019), or $10 million dollars.
What costs are eligible for payroll?
• Compensation (salary, wage, 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 required for the provisions of group health care benefits, including insurance premiums
• Payment of any retirement benefit
• Payment of State or local tax assessed on the compensation of employees
Will this loan be forgiven?
The loan may be forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities during the first 8 weeks after the loan closes. It is required that at least 75% of the forgiven amount must have been used for payroll in order for the loan to be forgiven.
Forgiveness is based on whether or not the borrower maintains or quickly rehires employees and maintains salary levels. Forgiveness will be reduced if full-time staff count declines, or if salaries and wages decrease.
If you are seeking forgiveness, you can work with your lender to make that request.
How will my interest rate and term be calculated?
The terms of this loan are the same for all borrowers. It has a maturity of 2 years and an interest rate of 1.0%.
When will I begin paying on my loan?
Loan payments will be deferred for 6 months. It is important to note that interest will continue to accrue over this 6-month deferral period. After a 6-month payment deferral, any unforgiven amount will be fully amortized over the remaining 18 months with principal and interest payments due monthly.
Are there prepayment penalties for this loan?
No, there are no prepayment penalties or fees associated with this loan.
What type of collateral will be required?
No collateral is required.
What do I need to do next?
We understand that there is an abundance of information circulating about the Paycheck Protection Program (PPP) and it can be overwhelming. Rest assured, that our lenders are happy to answer questions and guide you through this process.
Call one of our commercial lenders or business development officers today, we want to help.
Evan Dixon | (270) 631-1045 | NMLS # 940075
Bill Floyd | (270) 831-1527 | NMLS #785447
Tonya Knight | (270) 831-1524 | NMLS #785444
Daniel Smith | (270) 831-1638 | NMLS #469932
Kyle Fuller | (270) 631-1043 | NMLS #938258
Danny Garness | (270) 831-1668 | NMLS #967482
Geoff Gentil | (812) 402-7894 | NMLS #1751879
Carl Powers | (812) 402-7476 | NMLS #1007682
Jennifer Drennan | (859) 554-3663 | NMLS #686331
Scott Pitts | (859) 554-9664 | NMLS #421053
Tonya Dryden | (859) 234-3585 | NMLS #770866