PayCHECK Protection Program (PPP) for SMALL BUSINESS MEMBERS
The Cares Act
West Community understands the significant impact that the COVID-19 pandemic is having on many of our small business members. We continue to work with the newly enacted federal Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide a variety of additional emergency relief programs for businesses including the Paycheck Protection Program. We are actively working to utilize available programs for our existing members and will continue to update this site with the latest information.
Paycheck Protection Program
The CARES Act created the Paycheck Protection Program, which will serve as an extension of the Small Business Administration (SBA) 7(a) loan program, allowing financial institutions to provide federally-backed, forgivable loans to eligible businesses. West Community plans to offer this to existing members.
Though the SBA is still finalizing guidance documents, below is our current understanding of the Paycheck Protection Program Provisions.
- Available to small- and medium-sized businesses with less than 500 employees (subject to limited exceptions), including 501(c)(3) nonprofit organizations, 501(c)(19) veterans organizations, and/or Tribal businesses.
- Loan proceeds may only be used for specific expenses, such as payroll costs, utilities, mortgage interest, rent/lease payments, group healthcare benefits, interest on existing debt, and other approved efforts to retain employees.
- Maximum loan size is up to 2.5 times average monthly payroll costs over the prior 12 months for most businesses, or over a more targeted period for seasonal businesses, but may not exceed $10 million 1.
- Paycheck Protection Program loans do not require a personal guarantee nor collateral.
- All or a portion of the loan may be forgiven.
- The amount of forgiveness is calculated as the sum of amounts paid in the eight weeks following loan origination for: a) Payroll, b) mortgage interest, c) rent and d) utilities.
- Borrowers will not be charged any participation fees or pre-payment fees.
- Balances remaining after loan forgiveness will have a max maturity of 10 year.
- Loan and interest payments are deferred for at least 6 months but no more than 1 year.
- Impacted businesses may only receive one Paycheck Protection Program loan.
- All eligible entities impacted by COVID-19 between February 15, 2020 and June 30, 2020 may apply.
- Loans will be available through June 30, 2020, although program funding limitations may impact loan availability for those businesses applying later in the availability timeframe.
This information is preliminary and is subject to change. As the SBA continues to publish program guidance about the Paycheck Protection Program, we are committed to keeping you informed.
Although we are still waiting for final program details from the SBA, you can begin gathering the information that we believe may be required as part of the application process. Please note, we are only accepting applications from existing West Community business members.
Below is a list of documents that West Community believes will be beneficial to you when applying for a Paycheck Protection Program loan:
2019 IRS Quarterly 940, 941 or 944 payroll tax reports.
Payroll reports for a twelve-month period (ending on your most recent payroll date), which will show the following information:
i. Gross wages for each employee, including officer(s) if paid W-2 wages.
ii. Paid time off for each employee
iii. Vacation pay for each employee
iv. Family medical leave pay for each employee
v. State and local taxes assessed on an employee’s compensation
Documentation showing total of all health insurance premiums paid by the company owner(s) under a group health plan.
i. Include all employees and the company owners.
Document the sum of all retirement plan funding that was paid by the company owner(s) (does not include funding that came from the employees out of their paycheck deferrals).
i. Include all employees, including company owners.
ii. Include 401K plans, Simple IRA, SEP IRAs.
This program is for existing West Community members. Be sure to check this site regularly as we work to provide you with provision updates as they become available.
Read the SBA Paycheck Protection Program Final Rule to review:
- What borrowers need to know and do
- What qualifies as payroll costs
- How to calculate the amount you can borrow
- Examples of payment methodology
- Complete Payment Protection Program Guidelines
Click here for additional information on the Payment Protection Program provided by the U.S. Small Business Administration.
1 For seasonal firms, 2.5x the average monthly payroll for 12-week period starting either February 15th, 2019 or March 1st, 2019 (at the election of the borrower). For businesses without a full year of payroll history, 2.5x the average monthly payroll from January 1st, 2020 to February 29th, 2020.