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Paycheck Protection Program (PPP): First Draw Loans

May 5, 2021 - SBA is no longer accepting PPP applications. Please visit this site for any future updates.


Taylor Bank is committed to helping our business customers navigate through these uncertain times.

We are proud to have assisted 546 local businesses last spring, with more than $33 million in relief funding through the Paycheck Protection Program, and we are readying our teams to begin again.

Whether you're applying for a PPP Loan for the first or second time, we are here to answer your questions and guide you through the
application process.

PLEASE NOTE: The last day to turn in your application to us to be filed with the SBA is May 28th at 4pm.

If you are an existing customer and are applying for your first PPP loan, please continue reading. If you are an existing customer and applying for a second round of PPP funding, please click here to visit our Second Draw Loans page.

1st Time PPP Borrowers

Are you eligible?

  • Did not receive any PPP related funds from Taylor Bank or any financial institution during round 1 of Paycheck Protection Period
  • Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)
    • Note sure if your business meets the SBA’s size standards? Visit https://www.sba.gov/federal-contracting/contracting-guide/size-standards#section-header-0
  • Sole Proprietors, Independent Contractors, and Self-Employed Persons
  • Any business with a NAICS code that begins with 72 that has more than one physical location and employs less than 500 per location.
    • NAICS Code 72 represents Accommodation and Food Services
  • Any business, non-profit organization, veterans organization, or Tribal business concern with the greater of:
    • 500 employees or that meets the SBA industry size standard if more than 500.

Qualified Expenditures

  • If you want your PPP loan to be forgiven, the proceeds must be used on certain eligible expenses pertaining to your business:
  • Covered Operations Expenditures:
    • Includes payroll, rent, mortgage interest, and utilities.
    • Includes payments for business software or cloud computing services that facilities business operations, product or service delivery, processing payment, tracking of payroll expenses, HR and billing functions, or account or tracking of supplies, inventory, records, or expenses.
  • Covered Property Damage Costs:
    • Includes costs related to property damaged, vandalized, or looted due to the public disturbances that occurred during the 2020 year that was not covered by insurance or other compensation.
  • Covered Supplier Costs
    • Includes expenditures to a supplier of goods that are essential to the operations of the business at the time at which the expenditure was made.
  • Covered Worker Protection Expenditures:
    • Includes operating or capital expenditures that allow a business to comply with requirements issued by the CDC, HHS, OSHA, or any state/local government during period beginning March 1st, 2020 and ending on the date on which the national emergency declared by the President under the National Emergencies Act with respect to the COVID-19 disease expires.
    • This may include the purchase, maintenance, or renovation of assets that create or expand:
  1. A drive-through window facility
  2. An indoor, outdoor, or combined air or air pressure ventilation or filtration system;
  3. A physical barrier such as a sneeze guard;
  4. An expansion of additional indoor, outdoor, or combined business space;
  5. an onsite or offsite health screening capability; or
  6. other assets relating to the compliance with the requirements or guidance described in subparagraph (A), as determined by the Administrator in consultation with the Secretary of Health and Human Services and the Secretary of Labor; the purchase of—
    1. covered materials described in section 328.103(a) of title 44, Code 16 of Federal Regulations, or any successor regulation
    2. particulate filtering face piece respirators approved by the National Institute for Occupational Safety and Health, including those approved only for emergency use authorization; or
    3. other kinds of personal protective equipment, as determined by the Administrator in consultation  with the Secretary of Health and Human Services and the Secretary of Labor
    4. Does not include residential real property or intangible property

How to Calculate your Maximum Loan Amount

  • In order to compute your maximum loan amount you can receive, you must first calculate your “Average Monthly Payroll” costs.
    • Use the average monthly payroll for either 2019 or 2020, excluding any amount above $100,000.
      • For Seasonal Businesses: you can elect to use the average total monthly payroll for any 12-week period selected by you during February 15th, 2019 to February 15th, 2020 up to $100,000.
      • For New Businesses: average monthly payroll may be calculated using the time period from January 1st, 2020 to February 29th, 2020 up to $100,000.
  • Step 1: Calculation of Average Monthly Payroll Expenses depends on the type of business you operate:
    • Sole Proprietorship w/ No Employees: At your election, use either Schedule C Line 31 or Schedule C line 7 of your 2019 or 2020 tax return. If the amount you've chosen is above $100, 000 reduce it to $100,000
      • If this amount is zero or less, than you are not eligible for a PPP loan.
    • Sole Proprietorship w/ Employees: Add the following items
      • At your election, use either Schedule C Line 31 or Schedule C Line 7, minus your employee payroll costs reported on lines 14, 19, and 26 of your 2019 or 2020 tax return. If the amount you chosen is above $100,000 reduce it to a $100,000.
      • Form 941 Taxable Medicare wages & tips (line 5c-column 1) from each quarter plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips, subtracting any amount paid to any individual employee in excess of $100,000 and any amounts paid to any employee whose principal place of residence is outside the U.S;
      • 2019 or 2020 employer contributions for employee health insurance (Schedule C Line 14)
      • 2019 or 2020 Employer contributions to retirement plans (Schedule C Line 19)
      • 2019 or 2020 employer state and local taxes assessed on employee compensation
    • Self-Employed Individuals who file Schedule F: At your election, use either Schedule F Line 34 or Schedule F Line 9 of your 2019 or 2020 tax return. If the amount you've chosen is above $100,000 reduce it to $100,000.

 

  • Partnerships: Add the following items
    • 2019 or 2020 Schedule K-1 (IRS Form 1065) Net earnings from self-employment of individual U.S based general partners that are subject to self-employment tax, computed from box 14a (reduced by any section 179 expense deduction claimed, unreimbursed partnership expenses claimed, and depletion claimed on oil and gas properties) multiplied by 0.9235,2 up to $100,000 per partner
    • 2019 or 2020 gross wages and tips paid to your employees whose principal place of residence is in the United States, if any, which can be computed using 2019 IRS Form 941 Taxable Medicare wages & tips (line 5c-column 1) from each quarter plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips, subtracting any amounts paid to any individual employee in excess of $100,000 and any amounts paid to any employee whose principal place of residence is outside the U.S
    • 2019 or 2020 employer contributions for employee health insurance,  (Form 1065 line 19)
    • 2019 or 2020 employer contributions to employee retirement plans (Form 1065 line 18)
    • 2019 or 2020 employer state and local taxes assessed on employee compensation
    • S-Corporations and C-Corporations: Add the following items
      • 2019 or 2020 gross wages and tips paid to your employees whose principal place of residence is in the United States, which can be computed using 2019 IRS Form 941 Taxable Medicare wages & tips (line 5c-column 1) from each quarter plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips, subtracting any amounts paid to any individual employee in excess of $100,000 and any amounts paid to any employee whose principal place of residence is outside the U.S;
      • 2019 or 2020 employer health insurance contributions (Form 1120 line 24 or Form 1120-S line 17);
      • 2019 or 2020 employer retirement contributions (Form 1120 line 23 or Form 1120-S line 17);
      • 2019 or 2020 employer state and local taxes assessed on employee compensation.
    • Nonprofit Organizations: Add the following items
      • 2019 or 2020 gross wages and tips paid to your employees whose principal place of residence is in the United States, which can be computed using 2019 IRS Form 941 Taxable Medicare wages & tips (line 5c-column 1) from each quarter plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips, subtracting any amounts paid to any individual employee in excess of $100,000 and any amounts paid to any employee whose principal place of residence is outside the U.S
      • 2019 or 2020 employer health insurance contributions (Form 990 Part IX line 9)
      • 2019 or 2020 employer retirement contributions ( Form 990 Part IX line 8)
      • 2019 or 2020 employer state and local taxes assessed on employee compensation
    • Eligible nonprofit religious institutions, veterans organizations, and tribal businesses: Add the following:
      • 2019 or 2020 gross wages and tips paid to your employees whose principal place of residence is in the United States, which can be computed using 2019 IRS Form 941 Taxable Medicare wages & tips (line 5c-column 1) from each quarter plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips, subtracting any amounts paid to any individual employee in excess of $100,000 and any amounts paid to any employee whose principal place of residence is outside the U.S;
      • 2019 or 2020 employer health insurance contributions (Form 990 Part IX line 9)
      • 2019 or 2020 employer retirement contributions (Form 990 Part IX line 8)
      • 2019 or 2020 state and local taxes assessed on employee compensation.
    • LLC: Follow the instructions that apply to their tax filing situation
  •  Step 2: Multiply step 1 by 2.5.
  • Step 3: Add any EIDL amount that you are receiving (Do not include any EDIL advances).
  • The lesser of step 3 or 10 million dollars is your maximum loan amount.

Loan Forgiveness

  • In order for your PPP loan to be forgiven, the following requirements must be met during the 8 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% of the proceeds are spent on payroll costs.
  • Documentation realizing these events will be required in order for your loan to be forgiven.

Other Important Loan Details

  • PPP loans have an interest rate of 1%
  • Loans issued prior to June 5th have a maturity of 2 years. Loans issued after June 5th have a maturity of 5 years
  • Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower’s loan forgiveness amount to the lender.
  • If a borrower does not apply for loan forgiveness payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (either 8 or 24 weeks)
  • No collateral or personal guarantees are required
  • Neither the government nor lenders will charge small businesses any fees.

How to Apply

  • All set to apply?
    • For Sole Proprietorships who file Schedule C that use gross income to calculate their loan amount, use this PDF link:
    • Download the PDF link below to get started on filing out your application.

Please note the deadline to apply for a PPP loan is May 28th at 4pm.

  • Once your application is completed and signed, you may either drop off the application along with an official copy of your payroll records for your selected timeframe at any Taylor Bank drive-thru. If you would like to submit the documents electronically, please call 410.641.1718 for secure email access.

FAQ

  • Please see this pdf link  for some Frequently Asked Questions answered directly by the SBA.

 

Have questions? Please contact our dedicated PPP Team at (410) 641-1718 or email ppplending@taylorbank.com

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