Paycheck Protection Program (PPP)

The latest update from the SBA

Beginning Wednesday, Feb. 24, the SBA will open a 14-day PPP loan application window for businesses and nonprofits with fewer than 20 employees. Please visit the SBA website for details.

Before getting started

Before you begin your application, we recommend you review the information titled What you should know before starting your PPP loan application under the tab at the bottom of this page. When you're ready, simply click on the link below that best answers this question:

Have you already received a previous PPP loan with TCU?

    YES          NO      I'm not sure.

 

PPP Basics

The Coronavirus Response and Relief Supplemental Appropriations Act (also referred to as the "Coronavirus Relief Act") that was recently signed into law includes another round of PPP funding for select businesses impacted by COVID-19.

The program offers a low-interest, deferred-payment loan to help cover payroll, benefits and other costs for periods ranging between eight and 24 weeks.

  • PPP loans do not require a personal guarantee or collateral
  • Borrowers will not be charged any participation fees or pre-payment fees
  • Businesses can qualify for loan forgiveness
    • Balances remaining after loan forgiveness are repayable over five years

More information is available on the SBA website.

We will continually update this page as new guidance from the SBA becomes available.

Other SBA Resources

The Economic Injury Disaster Loan program is also available through the SBA.  This is a direct loan from the SBA to the borrower.  Applicants must apply directly to the SBA, as financial institutions are not intermediaries in this loan program. Please refer to the SBA's EIDL web page for more information.

The SBA recently launched its third round of PPP funding to help small businesses keep their workforce employed during the COVID-19 crisis. This latest round offers first-time PPP loans as well as second-draw loans for businesses that have received previous PPP funding.

Loan payments are deferred for 10 months following the end of the disbursement period. However, your business could also qualify for loan forgiveness provided that during the disbursement period:

  • You maintain employee and compensation levels
  • Proceeds are spent on payroll costs and other eligible expenses
  • At least 60% of the proceeds are spent on payroll costs

Who qualifies?

According to the SBA, the following businesses may be eligible as long as they have been in operation since Feb. 15, 2020 and have been impacted by COVID-19:

  • Sole proprietors, independent contractors, and self-employed persons
  • Any small business concern*** that meets SBA’s size standards (either the industry size standard or the alternative size standard)
  • Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans’ organization, or tribal business concern with the greater of:
  • Any business with a NAICS code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location

The SBA provides a complete set of PPP FAQs here.

The SBA requires borrowers to submit their forgiveness applications within 10 months after using the funds. Please be assured we are committed to processing all applications well within that time period.

The forgiveness application underwent several modifications during its roll-out, such as:

  • The time period to use loan proceeds can be extended from 8 weeks to 24 weeks
  • The threshold for payroll portion to be used to qualify for 100% forgiveness has been lowered from 75% to 60%
  • Borrowers now have through the end of the year to restore employees and wages

The following components are key factors in determining forgiveness:

  • Documenting the use of loan proceeds was for eligible expenses 
  • Determining how much of the eligible costs were for payroll
  • Determining a reference period
    • Borrowers will compare loan proceeds used for payroll to a reference period and may choose from:
      • 2/15/19 through 6/30/19
      • 1/1/20 through 2/29/2020
      • 2/15/19 through 6/30/2019 (an option for seasonal businesses)
  • Comparing the full-time equivalents (FTEs) and wages during the loan period to the reference period
    • The amount forgiven may be reduced by reduction in FTEs and wage reductions in excess of 25%. However, this will not apply to employers who are able to restore FTEs and wages by 12/31/20

Be sure to document all uses of loan proceeds and gather the following documentation: 

  • Payroll costs
    • Bank accounts or third-party payroll service reports documenting the cash compensation paid to employees
    • Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the covered period or the alternative payroll covered period. For tax forms, the SBA is requesting payroll tax forms (usually 941) and state quarterly wage and unemployment filings
    • Payment receipts, cancelled checks or account statements documenting the amount of employer contributions to employee health insurance and retirement plans
  • Documentation of rent, mortgage interest and utilities
  • Evidence of existing obligations/services prior to Feb. 15, 2020
  • Evidence of payments during the eight-week period
    • Mortgage obligation:
      • Lender amortization schedule
      • Receipt of payments as well as statements from February 2020 and during the eight-week covered period
    • Rent or lease payments
      • Copy of the lease agreement must be produced showing it was in-force before Feb. 15, 2020
      • Copies of account statements from the landlord/lessor showing the payments or cancelled checks evidencing the payments made during the eight-week period

Your business is our top priority

You and your business’ financial well-being will always be our top priority. We will continue to share information as it becomes available. If you have any questions, please email us.

This latest round of PPP funding offers new (first-draw) loans for businesses applying for the first time, as well as an opportunity for businesses that received previous funding to apply for an additional amount (second-draw).

First-Draw PPP Loans

These can be used to help fund payroll costs, including benefits, and may 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. Maximum loan amount of a First Draw PPP Loan is 2.5x average monthly 2019 payroll costs (up to $2 million).

If you're applying for a first-draw loan, you should gather the following information together prior to entering the loan application portal:

  • Paycheck Protection Application form (SBA Form 2483)
  • Loan Calculator
  • 2019 941 payroll tax filings
  • Q1 2020 payroll tax filings
  • Tax return, including schedule C for sole proprietors and self-employed individuals
  • 1099 Misc filings for sole proprietors and self-employed individuals, along with proof of business activity in 2021
  • 2019 payroll summary
  • Employer-paid health insurance premiums
  • Employer-paid retirement plan expenses
  • Date business was established
  • NAICS code

Second-Draw PPP Loans

Similar to first-draw loans, these 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.

For most borrowers, the maximum loan amount of a second-draw loan is 2.5x average monthly 2019 or 2020 payroll costs (up to $2 million). For borrowers in the Accommodation and Food Services sector (use NAICS 72 to confirm), the maximum loan amount is 3.5x average monthly 2019 or 2020 payroll costs (up to $2 million).

If you're applying for a second-draw loan, you should gather the following information together prior to entering the loan application portal:

  • Paycheck Protection Application form (SBA Form 2483-SD)
  • Loan Calculator
  • 2019 or 2020 941 payroll tax filings
  • Tax return, including schedule C for sole proprietors and self-employed individuals
  • 1099 Misc filings for sole proprietors and self-employed individuals, along with proof of business activity in 2021
  • 2019 or 2020 payroll summary demonstrate at least a 25% reduction in gross receipts between comparable quarters from 2019 to 2020
  • Employer-paid health insurance premiums
  • Employer-paid retirement plan expenses
  • PPP frist-draw SBA loan number

Click here for a helpful guide about how to calculate revenue reduction and maximum loan amounts for second-draw PPP loans.

The above information is based on currently available information and is subject to change. We are committed to keeping you informed as we receive additional guidance from the SBA.