Paycheck Protection Plan FAQs

 
Application Process


Is there a guide to complete the application? 

Now that the U.S. Small Business Association (SBA) has begun funding loans, we know more about what will lead an application to be accepted vs. what will get it rejected. This step-by-step guide will walk you through our PPP application to ensure you have a completed application so that your PPP loan can be submitted, approved, and funded as fast as possible.

Why is my non-profit organization being asked to give details regarding ownership when there are no owners?

For non-profits, while there is no ownership to report, the system does require the SSN of one individual, such as a board member or someone of standing in that organization, to be able to tie the loan request to an individual and conduct verification. 


What does “too many documents" mean?

Please keep to 20 files by ensuring only those that are necessary are included, and combining any as needed, to increase options for funding.
 

Application Submitted

 

How will I know if my PPP application has been approved?

Applications submitted through the link on The Provident Bank’s website were facilitated by our partners: Kabbage and Lendio. These partners will be notifying you directly of loan approval. If you applied through our website on Friday, April 3, 2020, please direct your questions to Kabbage at 888-351-3143 . For applications submitted from our site on or after April 4, please contact Lendio at 855-853-6346.
 

I applied for a PPP loan during the first round of funding. Do I need to re-apply?

You do not need to re-apply, though please make sure that the following items are included in your application:

1. Date of Birth of the primary owners
2. Business start date
3. Six (6) Digit NAICS code (https://www.naics.com/search/

Can I apply multiple times through different lenders/platforms just in case?

Applying with Kabbage and/or Lendio through the link on our website does not limit you from applying with other lenders and/or platforms. However, if you’ve submitted or signed formal paperwork at an SBA lender by accepting the loan and its terms, you cannot reapply at an additional lender.
 

When will I receive my funds?

Once the loan is approved by the U.S. Small Business Association, the lender is required to make the first disbursement of the loan no later than ten calendar days from the date of loan approval.
 

When should I hire back the employees that I laid off?

The SBA is in the process of setting guidelines as to when you will be able to restore your full-time employment and salary levels for any changes made between February 15, 2020, and April 26, 2020. Please refer to the employment and salary-level requirements set forth by the U.S. Small Business Administration. 


My application for PPP has been accepted and confirmed. When and how can I apply for forgiveness?

The lender is required to make a decision on forgiveness within 60 days from the day you submit your forgiveness request and supporting documents. You’ll need to prove that the PPP loan amount was used appropriately in the allotted 8-week time period after you received the loan — with a minimum of 75% used for qualifying payroll costs and up to 25% used for business expenses like rent and utilities.  


What should I do differently after receiving PPP funds?

It’s encouraged to document how you’re using the funds as much as possible, since you’ll need to prove that you spent the proceeds on payroll and other qualified expenses. Also, be sure to file your quarterly payroll taxes on time.
 


Loan Forgiveness

Important! The guidance below is subject to change by the Small Business Administration at any time.


What steps do I follow to set us up for the most forgivable amount?

Use the loan amount in the following manner:
  • Apply at least 75% of the loan to payroll costs only
  • Utilize no more than 25% on:
    • Mortgage interest
    • Rent (may OR may NOT include payments on equipment leases, this is TBD)
    • Utilities (electricity, gas, water, telephone, or internet payments)
  • Expenses must be incurred and paid within 56 DAYS of the day your PPP loan was funded
    • The day that your loan was funded is included in the 56 days
    • Many advisors expect that expenses partially incurred in the 56-day time period and paid in the 56-day time period can be forgivable
      • Example 1: PPP Loan was funded April 15. $5000 monthly rent payment is due and paid April 1. $2500, or half (15 days / 30 days) would be forgivable
      • Example 2: PPP Loan was funded April 15. Payroll period is April 13 -April 19 and paid on April 24. The pro rata amount of payroll incurred April 15 - 19 would be forgivable, but NOT the payroll for April 13 and 14.
      • Example 3: PPP Loan was funded April 15. “Forgiveness” window ends June 9 (April 15 + 55 days). Payroll period runs June 1-7 and is paid out on June 12. To be forgiven, the payroll for June 1-7 would have to be paid before June 9

 

How do I understand the impact of headcount and salary reductions? 

Research how the forgiveness amount will be reduced and make any re-hires needed to satisfy those requirements by viewing the links to resources below and reach out to your lender to receive calculators for the math.

 

What are some tips to make figuring out and justifying forgiveness easier? 

  1. Set up a new bank account funded with the PPP loan and make all eligible payments from that account (any balance remaining at the end of the 56 day period can be prepaid)
  2. Each week, account for the expenses and assemble the supporting documents (for weekly expenses, documents might be ledger entries or other internal documents)
  3. Plan ahead. Determine when employees will be added and when will you pay them (see above)
  4. Use the attached calculator to streamline your efforts
  5. Continue to check back with the SBA, your CPA, and The Provident Bank for updates and changes to guidance

 

What are some tips to make figuring out and justifying forgiveness easier?

Please contact your lender or relationship manager to discuss the calculators that we have available for use. 

 

Are there any resources available to use?


Title

As of Date

Link

CARES Act

3/27/2020

https://www.congress.gov/bill/116th-congress/house-bill/748/text

SBA Guidance & FAQ’s

4/2/2020

https://www.sba.gov/document/?program=PPP

PPP Loan Forgiveness: Further Guidance on the Math

4/13/2020

https://www.verrill-law.com/publications/ppp-loan-forgiveness-further-guidance-on-the-math/?utm_source=alert&utm_medium=email&utm_campaign=PPP_math

PPP Forgivable Loan Program: How to Do the Math

4/20/2020

https://www.verrill-law.com/publications/ppp-forgivable-loan-program-how-to-do-the-math/

Harvard Business School - FAQ on PPP

4/22/2020

https://www.hbs.edu/covid-19-business-impact/Topics/Adapting-Your-Business/FAQ-for-Payment-Protection-Program-PPP-Loans#page_section-71874

Treasury Secretary website

4/26/2020

https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses

Treasury Secretary FAQ - before 4/24/20


https://home.treasury.gov/system/files/136/PPP%20Borrower%20Information%20Fact%20Sheet.pdf

Provident Bank FAQ

4/30/20

https://www.theprovidentbank.com/paycheck-protection-plan-faq

 

Important Reminders:

If any amount of the PPP loan is NOT forgiven, the terms of the applicable loan documents will determine repayment. Please refer to those loan documents for details.
 
The CARES Act requires that the Borrower certify to the forgiveness amount and that the Bank accept the Borrower’s certifications and supporting documents. If the Borrower misstates the forgiveness amount, it may be treated as a Federal crime, with serious consequences to the Borrower.
 
The guidance above is subject to change by the Small Business Administration at any time.