Paycheck Protection Program (PPP) Loan Forgiveness
The Small Business Administration (SBA), in consultation with the Department of the Treasury, released the Paycheck Protection Program (PPP) Loan Forgiveness Application and detailed instructions for the application. The form and instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities. The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
- Options for borrowers to calculate payroll costs using an "alternative payroll covered period" that aligns with the borrowers’ regular payroll cycles:
- Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their 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; and
- 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.
The documents will help small businesses seek forgiveness atthe conclusion of the eight-week covered period, which begins with thedisbursement of their loans. Click here to view the application and instructions.
Information on SBA assistance for Ontario County businesses can be found at:
There are five ways the SBA can assist Ontario County businesses through COVID-19:
- Economic Injury Disaster Loans (EIDL) --- Direct SBA loans to small businesses, agriculture (including farms), and private non-profits for interim working capital. Apply directly with the SBA at www.sba.gov/disaster The amount loaned is calculated on cash flow of a business (max is $2,000,000). There may be up to 12months of deferred payment of principal and interest. Proceeds can be used to fixed debts, payroll, and accounts payable. The interest rate is 3.75% (2.75% for private, non-profits) and the term can go up to 30 years. Loans greater than $25,000 require collateral. Businesses can apply for up to a $10,000 cash advance on EIDL that they will receive within 3 days and will become a grant to the business ($1,000 per employee up to $10,000 maximum).
- Express Bridge Loans --- Loans of up to $25,000 that you apply for through your local SBA Express Lender. It allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loan or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. These loans will be repaid in full or in part by proceeds from the EIDL loan
- SBA Debt Relief --- This program is for businesses with existing SBA loans. It will pay monthly payments (including principal, interest and fees) on existing SBA 504, 7(a), Community Advantage, and Microloans for 6 consecutive months beginning with any payment due on or after March 27, 2020. Interest will continue to accrue on the loan. 1201 monthly payment notices will continue to be mailed out which will reflect the loan is deferred and no payment is due. The deferment will NOT cancel any established Preauthorized Debit (PAD) or recurring payments on your loan. Borrowers that have established a PAD through Pay.Gov or an OnLine Bill Pay Service are responsible for canceling these recurring payments. After this automatic deferment period, borrowers will be required to resume making regular principal and interest payments. Borrowers that cancelled recurring payments will need to reestablish the recurring payment. If you currently have an SBA loan with Pursuit (formerly NYBDC), you do not need to do anything to take advantage of this program.
- Payroll Protection Program (PPP) --- This program started April 3, 2020. Guidance is still being developed. It is a loan of up to $10,000,000 to maintain/rehire employees through 6/30/2020 (retroactive to 2/15/2020). Loan amount is 2.5 times your average monthly payroll in 2019. Businesses with less than 500 employees or which meet SBA industry size standards are eligible. Eligible uses of funds are for payroll, mortgage interest, rent, and utilities only. The interest rate is 1.0%, and it has a 2 year maturity. Payments are deferred for 6 months. If at least 75% of PPP funds are used for payroll, the loan will be forgiven. Apply for this through your local lender. No collateral or personal guarantee is required.
- SBA Partners --- The Small Business Development Center (SBDC) and SCORE are able to assist businesses. Here is their contact information:
All SBA CARES Act information can be found at: www.sba.gov/coronavirus