PAYCHECK PROTECTION PROGRAM (PPP) UPDATE
As of Tuesday, May 19,The Bank of Marion had processed 419 applications in the two rounds of the Paycheck Protection Program for a total of over $21.3 million in funding for area small businesses. This represents the retention thus far of 3,018 jobs in the bank’s market area.
We are pleased to have been a conduit for getting these Small Businesses Administration loan funds into the hands of business owners in our area to help them stay in business and keep their employees on the job.
As the current Paycheck Protection Program winds down, small business borrowers who received PPP loans should immediately turn their attention to the forgiveness part of the loan program if they haven’t done so already.
IMPORTANT REMINDERS FOR PPP LOAN RECIPIENTS!
As the current round of the Paycheck Protection Program (PPP) moves toward conclusion, we believe it is very important that we remind all PPP borrowers about the Small Business Administration’s (SBA) requirements for loan forgiveness. We don’t want any business to miss out on loan forgiveness - in full or in part – due to lack of awareness about the forgiveness requirements.
- The Paycheck Protection Program is meant to help employers keep their employees working. It is a bridge to help businesses stay open and keep their workers on the payroll while the economy moves toward normalcy.
- The program is for small businesses with fewer than 500 employees. These businesses can borrow up to 2 ½ times their payroll with some exclusions.
- It is a loan. It is not a grant.
- The loan can be forgiven in whole or in part IF the borrower adheres to the strict rules for loan forgiveness. If not, the borrower must pay back any portion of the loan that does not qualify for forgiveness. The borrower will owe money when the loan is due if the loan funds are used for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan.
- At least 75% of the loan proceeds must be used for ongoing payroll and must be used within the 8-week period following the funding of the loan.
- Up to 25% of the loan proceeds can be used for business rent, interest on business mortgage payments, and business utilities.
- It is up to the borrower to maintain the necessary documentation for loan forgiveness; it is not the bank’s responsibility.
- It is a good idea for borrowers to set aside any funds that can’t be used as prescribed to make payback easier at the end of the 8 weeks.
- Borrowers must have the same number of full-time equivalent employees (FTE) on the payroll when they apply for the loan as they had on February 15, 2020. Any furloughed or laid-off employees must be back on the payroll at the end of the 8 weeks.
Our Commercial Lenders are happy to discuss any of the requirements for loan forgiveness and answer any questions you may have.
We are pleased to have been the conduit for getting the SBA’s PPP loan funds into the hands of small business owners in our local markets. We hope that these loans will help small business owners and their employees weather this extremely challenging economic storm. We thank these business owners for fighting to keep their business running and their employees on the job. Our communities need you!
For additional in-depth information related to PPP loan forgiveness please see our PPP FAQ.