Paycheck Protection Program Loan Information

Small business owner looking over financial documents

SBA Paycheck Protection Program Update (as of January 15, 2021)

The Small Business Administration (SBA) has reopened the Paycheck Protection Program (PPP) for first-time borrowers through its First Draw PPP Loan program; as well as, borrowers who participated in the initial round of PPP funding offered from April 2020 – August 2020 through its Second Draw PPP Loan program.  Borrowed funds for both programs can be utilized to help fund any of the following:

  • Payroll costs - including benefits;
  • Mortgage interest;
  • Lease/rent expense;
  • Utilities;
  • Worker protection costs related to COVID-19;
  • Uninsured property damage costs caused by looting or vandalism during 2020; and
  • Certain supplier costs and operational expenses

 

Please find a checklist of information required to process your First Draw PPP Loan or Second Draw PPP Loan by clicking here.

Apply now

 

First Draw PPP Loans and Second Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness, if during an 8-week or 24-week covered period following loan disbursement:

  • Employee number and compensation levels are maintained;
  • The loan proceeds are spent on payroll costs and other eligible expenses referenced above; and
  • At least 60% of the proceeds are spent on payroll costs

A borrower is generally eligible for a First Draw PPP Loan if the borrower: 

  • Is a small business entity – which includes nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors – that began business operations prior to February 15, 2020 and did not permanently close since that date; and
  • Together with their affiliates (if applicable), has 500 or fewer employees - Entities with more than 500 employees in certain industries that meet SBA’s alternative size standard or SBA’s size standards for those particular industries can also apply.

The maximum loan amount of a First Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs.

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

  • Previously received a First Draw PPP Loan and will or has used the full amount received for eligible expenses, as evidenced by a fully-forgiven First Draw PPP Loan or an application submitted for forgiveness of a First Draw PPP Loan;
  • Together with their affiliates (if applicable), has 300 or fewer employees; and
  • Can demonstrate at least a 25% reduction in gross receipts/revenue between comparable calendar quarters in 2019 and 2020

For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million.  For borrowers in the Accommodations and Food Services industries (NAICS Code 72XXXX), the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.

TwinStar Credit Union will begin accepting First Draw PPP Loan and Second Draw PPP Loan applications on Tuesday, January 19, 2021.  We will only be accepting applications through our secure PPP application portal.  All applications will be processed in the order in which they are received and can only be processed once they are fully completed and the necessary documentation is received.  Please note that the funds for this program are limited and subject to approval from the SBA. 

For more information and details regarding either of these funding relief programs, please visit www.sba.gov or www.treasury.gov.   

Thank you for choosing TwinStar Credit Union to help continue to support you, your business and your employees with all your banking needs during these difficult times.

 

SBA Paycheck Protection Program Update (as of January 11, 2021)

First Draw PPP Loans are designed for those that did not participate in the SBA’s first round of PPP funding released in April 2020 and can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

Who Can Apply?

Eligible small entities, that together with their affiliates (if applicable), have 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors—can apply.  Entities with more than 500 employees in certain industries that meet SBA’s alternative size standard or SBA’s size standards for those particular industries can also apply.

Can I Reapply or Request a Loan Increase?

 Existing PPP borrowers that did not receive loan forgiveness by December 27, 2020 may:

  1. Reapply for a First Draw PPP Loan if they previously returned some or all of their First Draw PPP Loan funds, or
  2. Under certain circumstances, request to modify their First Draw PPP Loan amount if they previously did not accept the full amount for which they are eligible.

How & When to Apply

Borrowers can apply for a First Draw PPP Loan until March 31, 2021, through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, eligible non-bank lender, or Farm Credit System institution that is participating in PPP.  All new First Draw PPP Loans will have the same terms regardless of lender or borrower.

Full Forgiveness Terms

First Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8-week to 24-week covered period following loan disbursement:

  • Employee and compensation levels are maintained;
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • At least 60 percent of the proceeds are spent on payroll costs.

Paycheck Protection Program Second Draw Loans

The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan.  Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

Eligibility Requirements

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

  • Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
  • Has no more than 300 employees; and
  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

Maximum Loan Amount / Increased Assistance for Accommodation and Food Services Businesses

For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. For borrowers in the Accommodation and Food Services sector (NAICS 72XX), the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.

How & When to Apply

Borrowers can apply for a Second Draw PPP Loan until March 31, 2021, through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, eligible non-bank lender, or Farm Credit System institution that is participating in PPP.  All Second Draw PPP Loans will have the same terms regardless of lender or borrower.

Full Forgiveness Terms

Second Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8-week to 24-week covered period following loan disbursement:

  • Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan;
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • At least 60 percent of the proceeds are spent on payroll costs.

Visit www.sba.gov or www.treasury.gov for more information and details, including the comprehensive program rules.

 

SBA Paycheck Protection Program Update (as of December 22, 2020)

On December 21, 2020, Congress passed a second stimulus bill that will provide an additional round of funding for small businesses impacted by the COVID-19 pandemic through the Paycheck Protection Program (PPP). Congress also passed additional rule changes to the PPP loan forgiveness application process that is anticipated to be simplified and more favorable to borrowers with PPP loan balances of $150,000 or less.  

TwinStar Credit Union intends to once again participate in offering PPP funding to its eligible business members and further support businesses within the communities we serve – pending final guidance from the SBA.  Please continue to visit our website for updates to the Paycheck Protection Program and our PPP loan application portal when it becomes available in the coming weeks.

As details surrounding the new release of PPP funding are limited at this time, we recommend that you consult your accountant and/or legal counsel to determine how these new rules might impact your business.  We understand that many of our business members need funding and we’re committed to continue to help support our members and communities that have been effected by the negative impacts from the COVID-19 pandemic.

Paycheck Protection Program Loan Forgiveness

TwinStar Credit Union has been proud to continue to support our business members and local businesses within our communities through these difficult times and would like to thank those that chose TwinStar to process and service their Paycheck Protection Program (PPP) loan.

As the PPP loan program has transitioned into the forgiveness phase, we are prepared for changes to the guidelines and requirements previously issued by the Small Business Administration and U.S. Treasury Department.

TwinStar Credit Union is only accepting applications through a secure and automated online process through DocuSign, that will assist you in completing your PPP Loan Forgiveness Application and upload all required documents from the convenience of your computer, tablet, or mobile phone. All PPP loan borrowers were presented with an email link and a separate access code to complete your application for forgiveness.  If you did not receive or misplaced this link and would like to submit your PPP loan forgiveness application, please email our Business Services department at BusinessServices@TwinStarCU.com to request further access.

UPDATE:  On October 8, 2020 the Small Business Administration (SBA) announced changes to the Paycheck Protection Program loan forgiveness process.  These changes include a simplified loan forgiveness application (SBA Form 3508S) for borrowers with PPP loans of $50,000 or less.  This new application form is now available within TwinStar Credit Union’s online and secure PPP loan forgiveness portal.

  • For members who have already submitted a loan forgiveness application, we will continue to process your application unless you inform us that you would like to withdraw your application and reapply using the new 3508S application.  Please be advised that once your application has been submitted to the SBA you will be unable to withdraw it.
  • For members who have not yet submitted a loan forgiveness application and qualify to utilize this new form, you are encouraged to apply using the new 3508S application.

PPP Loan Forgiveness Application Information (released June 17, 2020)

The SBA updated the PPP Loan Forgiveness Application to streamline the forgiveness application process for certain borrowers. The “EZ” Paycheck Protection Program Loan Forgiveness Application (SBA Form 3508EZ) is a three-page form, requiring less documentation and supporting information than previously required.  This form applies exclusively to those borrowers who meet any one of the following criteria:

  • Applied for the PPP loan as self-employed, an independent contractor or a sole proprietor with no employees.
  • Did not reduce salary or wages for any employee by more than 25%, and did not reduce the number or hours of their employees (excepting laid-off employees who refused an offer to return).
  • Did not reduce salary or wages for any employee by more than 25% during the covered period and experienced reductions in business activity as a result of health directives related to COVID-19.

 

SBA also previously updated the standard PPP Loan Forgiveness Application (SBA Form 3508) to reflect changes as amended by the Paycheck Protection Program Flexibility Act and are for those borrowers that fail to meet the requirements referenced above.

Instructions for all Loan Forgiveness Applications can be accessed via the SBA website (https://www.sba.gov/) or by selecting the links below:

 

In addition, the SBA recently released additional guidance on a PPP borrower’s request for loan forgiveness on their website https://www.sba.gov/ in the form of Frequently Asked Questions (FAQs).The document addresses questions related to general loan forgiveness, forgiveness of payroll and non-payroll expenses, loan forgiveness reductions, etc. You can further access and review this document by clicking HERE

 

If you have any questions regarding your PPP loan and/or the forgiveness process, please contact our Business Services team at BusinessServices@twinstarcu.com for further assistance.

Thank you for choosing TwinStar Credit Union to help support you, your business and your employees with all your banking needs during these difficult times. We’re here to continue to help support our members and communities that have been effected by the negative impacts from the COVID-19 pandemic.

 

Updated 1/20/2021