Q: Is my business eligible to apply for a PPP loan?
A: You should review carefully the required certification that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” You must make this certification in good faith, taking into account your current business activity and ability to access other sources of liquidity sufficient to support your ongoing operations in a manner that is not significantly detrimental to the business. Companies should be prepared to demonstrate to the SBA, upon request, the basis for its certification.
The following entities affected by Coronavirus (COVID-19) may be eligible:
1. Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)
2. Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
a. 500 employees, or
b. That meets the SBA industry size standard if more than 500
3. 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
4. Sole proprietors, independent contractors, and self-employed persons
As a sole proprietor, you are able to apply for either the PPP or unemployment, but not both. As a business owner with employees, the decision between applying for a PPP loan or laying off your employees so they can collect unemployment benefits becomes more complicated. In either case, we encourage you to work with a financial professional, such as your accountant, to determine if PPP is the best option for your business.
Q: What can I use the PPP loan for?
A: You should use the proceeds from this loan on your:
1. Payroll costs, including:
a. Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
b. Employee benefits including costs for vacation, parental, family, medical, or sick leave; an allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
c. State and local taxes assessed on compensation; and
d. For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee
2. Interest on mortgage obligations, incurred before February 15, 2020;
3. Rent, under lease agreements in force before February 15, 2020; and
4. Utilities, for which service began before February 15, 2020.
Q: Can I apply for a PPP loan at more than one bank?
A: Your PPP loan can only be approved for funding through one financial institution. If Village Bank is not the first bank that you have applied with, confirm your application status at the first institution before submitting a second application. If you have difficulty getting confirmation, we suggest you withdraw your application before applying with Village Bank.
Q: How do I apply for a PPP loan with Village Bank?
A: Village Bank wants to help as much of our community as possible, but we cannot guarantee we will be able to help everyone. To be added to our queue for the second round of SBA funding, your next step is to submit your application as well as supporting documentation listed below as soon as possible.
Document Preparation List:
Please refer to the following document preparation list below to assist you as you gather the necessary information to process your application:
1. Wholly completed, initialed, and signed Payment Protection Program (PPP) Application & Checklist form
2. Articles of Incorporation/Organization of each borrowing entity (confirming date of establishment of the entity with the Sec. of State)
3. By-Laws/Operating Agreement of each borrowing entity
4. Payroll Expense verification documents to include:
a. IRS Form 941 and 944
b. Payroll Summary Report
c. If a Payroll Summary Report is not available, Employee Pay Stubs as of February 15, 2020 (or corresponding period) with corresponding bank statements, and,
d. Breakdown of payroll benefits (vacation, allowance for dismissal, group healthcare benefits, retirement benefits, etc.)
5. Employer-paid Health/Dental/Vision-related cost breakdown detail
6. Employer contribution detail relating to individual retirement accounts
7. NAICS industry code detail for each borrowing entity
8. If you are an Independent Contractor, 1099s and 2019 Schedule Cs are needed
9. Copy of Driver’s Licenses or other state-issued photo I.D.
10. Completed CARES Estimate Tool workbook (above-listed information to support and confirm calculation detail)
For additional guidance with regards to your loan amount calculation, please refer to the PPP Borrower Information Fact Sheet for more answers to commonly asked questions about PPP, and the Borrower’s Forgiveness Guide for Paycheck Protection Program Loans for information regarding SBA PPP loan forgiveness.
Completed applications and corresponding documents can be emailed directly to our loan processing team at SBA@villagebankonline.com.
Q: How do I calculate the loan amount that my business should be requesting?
A: Leverage this FAQ document for calculating maximum loan amounts by business type and work with a financial professional like your accountant to make sure your payroll numbers are correct.
Q: Who should I be working with to complete the application properly?
A: Work with your accountant or bookkeeper to calculate accurate payroll amounts and gather the required documentation. It's important that you are looking ahead and turning in the most complete application possible. Also, make sure to include everyone with at least 20 percent ownership in the business because they are required to sign and initial everything, even if they’re not involved with the business.