SBA – Paycheck Protection Program CARES Act information and tips

April 6, 2020

SENB Bank is an approved U.S. Small Business Administration (SBA) lender. This federal legislation includes the Paycheck Protection Program under which eligible small businesses can apply for an SBA 7(a) program loan, a portion of which may be forgiven if certain criteria are met. The government has set aside $349 billion specifically for this Paycheck Protection Program to help businesses like yours through this emergency. All loans are subject to final rule making and eligibility requirements from SBA.

The COVID-19 pandemic has had a significant adverse impact on many businesses and their employees. The U.S. Small Business Administration has announced the Paycheck Protection Program (PPP) loan that may provide cash-flow assistance to employers who maintain their payroll during this emergency. Start date is April 3, 2020 and will run through June 30, 2020.

The following is a checklist of items required to move ahead with a PPP Loan application

• IRS Form 941 quarterly filings for calendar year 2019

• IRS Form 940 annual filing for 2019

• Payroll Summary Report for 2019 including:

  1. Salary, wages, commissions, and tips
  2. Employee benefits including pay for vacation, family, medical, and sick leave
  3. Severance payments
  4. Health care insurance premiums
  5. Retirement benefits
  6. State and local taxes assessed on compensation
  7. Roster of employees making more than $100,000

• ​​​​Company Payroll Report, as of, or around the date of, February 15, 2020, which must show the number of your employees and your total payroll cost at that time.

​​​​Click here to complete the PPP Loan Calculator to estimate loan eligibility amount.• Complete the Paycheck Protection Program Borrower Application SBA Form 2483 (4/20).  Answer all questions, initial all certifications, date and sign as required. In the PPP’s most recent guidance, the SBA is now emphasizing payroll costs as priority over all other expenses.

This link  provides the details all Coronavirus Relief Options offered by the SBA.

Click here to upload this information to our secure system. 

Please be certain the package you submit to us is complete or there WILL BE processing delays. 

Please also note we are only accepting applications from our current SENB Bank customer base at this time.

SENB Bank lenders are qualified to assist you with the SBA process and will help you navigate through the paperwork necessary to apply for this loan. If you have any questions or need assistance, please contact your Relationship Banker directly.

This is not the same as the SBA Disaster Loan Application Program that was announced last week, which is a direct loan through SBA. The CARES Act program is a new SBA 7(a) loan to your small business directly through SENB Bank.

5 things businesses can do right now:

Talk to your lender

If you are experiencing or expect to experience cash flow problems, talk to your trusted lender.

Plan for the next 3-6 months

Many businesses have sufficient funds or access to capital for 2-3 months. Looking ahead, however, is the uncertainty of how long this pandemic will last and how to handle the re-opening (if you are currently closed)we don’t know how long this will last to look ahead.

Be ready to produce required documentation

All loan programs will still require some information in order to underwrite the loan, including loans created through the CARES Act. The Paycheck Protection Act is intended to help cover 2 1/2 months’ worth of payroll and loan proceeds used for “covered expenses” will be forgiven upon verification. Gather your documentation now that will verify the number of employees on your payroll for the last 12 months and their pay rates. This should include IRS payroll tax filings and state income, payroll, and unemployment insurance filings. Also gather documentation verifying payments on covered mortgage obligations, lease obligations, and utilities.

Don’t panic and draw on lines of credit

There is plenty of liquidity in the system so don’t panic and draw on lines of credit unnecessarily. We are encouraging consumers to keep excess cash in insured financial institutions. At the same time, keep the line of credit available until you absolutely need to access it. Costs may be associated with accessing your line of credit and if you don’t need to incur this added expense, don’t.

Have patience

We want to help you through these unprecedented times, but, not all programs are in place yet, and even when they are, technology can cause hiccups or delays including systems crashing.


The programs and initiatives in the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was just passed by Congress are intended to assist business owners with whatever needs they have right now. When implemented, there will be many new resources available for small businesses, as well as certain non-profits and other employers. The following information will provide information on the Paycheck Protection Program Loans that will soon be available from the Small Business Administration (SBA) to address these needs.

To keep up to date on when these programs become available, please stay in contact with your lender or your local SBA District Office, which you can locate here.

Paycheck Protection Program (PPP) Loans

The program would provide cash-flow assistance through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would be forgiven, which would help workers remain employed, as well as help affected small businesses and our economy snap-back quicker after the crisis. PPP has a host of attractive features, such as forgiveness of up to 8 weeks of payroll based on employee retention and salary levels, no SBA fees, and at least six months of deferral with maximum deferrals of up to a year. Small businesses and other eligible entities will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020. This program would be retroactive to February 15, 2020, in order to help bring workers who may have already been laid off back onto payrolls. Loans are available through June 30, 2020.

Frequently Asked Questions

What types of businesses and entities are eligible for a PPP loan?

  • Businesses and entities must have been in operation on February 15, 2020.
  • Small business concerns, as well as any business concern, a 501(c)(3) nonprofit organization, a 501(c)(19) veterans organization, or Tribal business concern described in section 31(b)(2)(C) that has fewer than 500 employees, or the applicable size standard in number of employees for the North American Industry Classification System (NAICS) industry as provided by SBA, if higher.
  • Individuals who operate a sole proprietorship or as an independent contractor and eligible self-employed individuals.
  • Any business concern that employs not more than 500 employees per physical location of the business concern and that is assigned a NAICS code beginning with 72, for which the affiliation rules are waived.
  • Affiliation rules are also waived for any business concern operating as a franchise that is assigned a franchise identifier code by the Administration, and company that receives funding through a Small Business Investment Company.

What are affiliation rules?

Affiliation rules become important when SBA is deciding whether a business’s affiliations preclude them from being considered “small.” Generally, affiliation exists when one business controls or has the power to control another or when a third party (or parties) controls or has the power to control both businesses. Please see this resource for more on these rules and how they can impact your business eligibility.

What types of non-profits are eligible?

In general, 501(c)(3) and 501(c)(19) non-profits with 500 employees or fewer as most non-profit SBA size standards are based on revenue, not employee number. You can check here.

How is the loan size determined?

Depending on your business’s situation, the loan size will be calculated in different ways (see below). The maximum loan size is always $10 million.

  • If you were in business February 15, 2019 – June 30, 2019: Your max loan is equal to 250 percent of your average monthly payroll costs during that time period. If your business employs seasonal workers, you can opt to choose March 1, 2019 as your time period start date.
  • If you were NOT in business between February 15, 2019 – June 30, 2019: Your max loan is equal to 250 percent of your average monthly payroll costs between January 1, 2020 and February 29, 2020.
  • If you took out an Economic Injury Disaster Loan (EIDL) between February 15, 2020 and June 30, 2020 and you want to refinance that loan into a PPP loan, you would add the outstanding loan amount to the payroll sum.

What costs are eligible for payroll?

  • Compensation (salary, wage, commission, or similar compensation, payment of cash tip or equivalent).
  • Payment for vacation, parental, family, medical, or sick leave.
  • Allowance for dismissal or separation.
  • Payment required for the provisions of group health care benefits, including insurance premiums.
  • Payment of any retirement benefits.
  • Payment of State or local tax assessed on the compensation of employees.

What costs are NOT eligible for payroll?

  • Employee/owner compensation over $100,000
  • Taxes imposed or withheld under chapters 21, 22, and 24 of the IRS code.
  • Compensation of employees whose principal place of residence is outside of the U.S.
  • Qualified sick and family leave for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act.

What are allowable uses of loan proceeds?

  • Payroll costs (as noted above).
  • Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums.
  • Employee salaries, commissions, or similar compensation (see exclusions above).
  • Payments of interest on any mortgage obligation (which shall no include any prepayment of or payment of principal on a mortgage obligation).
  • Rent (including rent under a lease agreement).
  • Utilities.
  • Interest on any other debt obligations that were incurred before the covered period.

What are the loan term, interest rate, and fees?

For any amounts not forgiven, the maximum term is 2 years, the maximum interest rate is 1 percent, zero loan fees, zero prepayment fee (SBA will establish application fee caps for lenders that charge).

How is forgiveness amount calculated?

Forgiveness on a covered loan is equal to the sum of the following payroll costs incurred during the covered 8 week period compared to the previous year or time period, proportionate to maintaining employees and wages (excluding compensation over $100,000):

  • Payroll costs plus any payment of interest on any covered mortgage obligation (not including any prepayment or payment of principal on a covered mortgage obligation) plus any payment on any covered rent obligations plus any covered utility payment.

How do I get forgiveness on my PPP loan?

You must apply through your lender for forgiveness on your loan. In this application, you must include:

  • Documentation verifying the number of employees on payroll and pay rates, including IRS payroll tax filings and State income, payroll and unemployment insurance filings.
  • Documentation verifying payments on covered mortgage obligations, lease obligations, and utilities.
  • Certification from a representative of your business or organization that is authorized to certify that the documentation provided is true and that the amount that is being forgiven was used in accordance with the program’s guidelines for use.

What happens after the forgiveness period?

Any loan amounts not forgiven are carried forward as an ongoing loan with max terms of 2 years, at a maximum interest rate of 1%. Principal and interest will continue to be deferred, for a total of 6 months to a year after disbursement of the loan. The clock does not start again.

Can I get more than one PPP loan?

No, an entity is limited to one PPP loan. Each loan will be registered under a Taxpayer Identification Number at SBA to prevent multiple loans to the same entity.

Where should I go to get a PPP loan from?

All current SBA 7(a) lenders are eligible lenders for PPP. The Department of Treasury will also be in charge of authorizing new lenders, including non-bank lenders, to help meet the needs of small business owners.

How does the PPP loan coordinate with SBA’s existing loans?

Borrowers may apply for PPP loans and other SBA financial assistance, including Economic Injury Disaster Loans (EIDLs), 7(a) loans, 504 loans, and microloans, and also receive investment capital from Small Business Investment Corporations (SBIC). However, you cannot use your PPP loan for the same purpose as your other SBA loan(s). For example, if you use your PPP to cover payroll for the 8-week covered period, you cannot use a different SBA loan product for payroll for those same costs in that period, although you could use it for payroll not during that period or for different workers.

How does the PPP loan work with the temporary Emergency Economic Injury Grants and the Small Business Debt Relief program?

Emergency Economic Injury Grant and Economic Injury Disaster Loan (EIDL) recipients and those who receive loan payment relief through the Small Business Debt Relief Program may apply for and take out a PPP loan as long as there is no duplication in the uses of funds.

Follow this link to see more about SBA PPP forgiveness. Learn more