Who is Eligible?
- Small businesses with less than 500 employees
- Sole proprietors are eligible but are subject to specific requirements in order to establish the amount of the loan which they are eligible for.
- Borrowers must provide a “good faith certification” that
- Uncertainty of the current economic conditions makes the loan necessary to support ongoing operations;
- Borrower will use the proceeds to retain workers and maintain payroll or make mortgage, lease, and utility payments;
- Borrower does not have an application pending for a loan duplicative of the purpose and amount applied for here
- From Feb 15, 2020 to Dec 31, 2020 the borrower has not received a loan duplicative of the purpose and amount applied for here
What documents do I need?
- The date you started your business
- Your annual revenue
- Business mailing address
- Borrowers must submit such documentation as is necessary to establish eligibility (which may include):
- Payroll report(s) detailing the defined twelve months compensation
- Quarterly or Annual payroll tax filings
- Documentation verifying the number of employees on payroll for the defined period
- Annual filings (W2s and W3, etc.)
- Severance agreements and payments
- Payment for health care benefits
- Payment of any retirement benefit (i.e., employer match for 401k, or SEP IRA, etc.) including statements or contribution reports
- Form 1099-MISC
- Income and Expense documentation of a sole proprietor
- For borrowers that do not have any such documentation, the borrower must provide other supporting documentation, such as:
- bank records, sufficient to demonstrate the qualifying payroll amount
How much can I borrow?
- Borrower can obtain loan for up to 2.5x the borrower’s average monthly payroll costs, not to exceed $10 million
- Payroll costs included in calculation:
- Compensation (salary, wage, commission, etc)
- Leave payments (vacation, parental, family, medical, sick, etc)
- Payments made under group health plans including the cost of insurance premiums
- Payroll costs exclude from the calculation:
- Compensation for employees in excess of $100,000 per year
- Compensation for an employee whose principal place of residence is outside the US
Will the loan be forgiven?
- Full principal of the loan will be forgiven if spent on covered expenses during the eight week period after the loan is made, subject to SBA requirements
- Covered expenses:
- Payroll costs
- Interest on mortgage obligations incurred in the ordinary course
- Rent on leasing agreements
- Payments on utilities
- Covered expenses:
- Forgiveness will be reduced if there is a reduction in the number of employees or a reduction of greater than 25% in wages paid to employees.