UPDATE: Congress has passed a second round of funding for the Paycheck Protection Program (PPP) and we are processing new applications in the order they arrive. If you have not yet applied for a PPP loan, follow the directions on this page to apply.

COVID-19: Getting Help For Your Small Business

Congress has created the Paycheck Protection Program (PPP) to help small business deal with the impact of Coronavirus.

The PPP small business loans — up to $10 million — are forgivable, which means your business gets to keep the money without paying it back, as long as you use it to keep paying employees (or other qualified expenses, which we'll cover below).

At Security National Bank, we're here to help get that money into your hands to help your business during this time.

 

How to Get a Paycheck Protection Program (“PPP”) Loan

You can apply for a PPP loan through an SBA-certified institution, like Security National Bank.

STEP 1:

The first step to apply is by filling out the government's application form:

PPP APPLICATION FORM (PDF) » 

STEP 2: 

Your second step is to prepare the following additional documentation:

For Small Businesses & Non-Profits

  • W-3 Form (from 2018 or 2019 tax year)
  • A summary of your payroll from 2019; including all employees
  • A calculation on how you came up with your average monthly payroll and the loan amount for which you will apply. Download our calculation worksheet (PDF) »

For Sole Proprietors & Independent Contractors

  • 2019 Schedule C (If you haven’t filed your 2019 taxes yet, download a Schedule C here and complete it. This must look exactly like the one you send to the IRS when you file, in case you are audited)
  • A calculation on how you came up with your average monthly payroll and the loan amount for which you will apply. Download our calculation worksheet (PDF) »

STEP 3:

Contact us or use the PPP Interest Form on this page, and we will work with you to verify and submit your application to the SBA.

Keep in mind there is a high amount of interest in this program, and limited funds available on a first-come, first-served basis — so we encourage you to apply as soon as possible. Application decisions may also be delayed by factors out of our control — like extraordinarily high volume and slow government response time. We cannot guarantee that the SBA will approve your application.

 

PPP Loans: What You Need to Know

Here are some answers to frequently asked questions about the Paycheck Protection Program. This information changes frequently, depending on rules and clarifications made by the SBA. We will continue to update our website as more information becomes available.

What are the loan terms?

  • 1% interest rate
  • 2-year period
  • Up to $10 million (or 2.5 times your average monthly payroll, based on last year’s payroll, not counting any salary amount above $100K  — whichever is less)
  • 100% guaranteed by the Small Business Administration (SBA)
  • No collateral or personal guarantees required
  • Up to 100% forgivable (more information below)

Who is eligible?

  • Small businesses and non-profits with less than 500 employees.
  • Sole proprietors, independent contractors and other self-employed individuals.. 

If your business is over 500 employees, you may still qualify. This depends on if you meet other Small Business qualifying criteria as set forth by the SBA.

What should you use the loan for?

  • Payroll costs*
  • Mortgage interest and obligations (incurred before Feb. 15)
  • Rent (lease agreements in force before Feb. 15)
  • Utilities (service began before Feb. 15)

*What counts as payroll costs?

  • Salary, wages, commissions, or tips (capped at $100,000 annually for each employee)
  • State and local taxes assessed on compensation
  • Employee benefits (including vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments for group health care benefits including insurance premiums; and payment of any retirement benefit)
  • For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment (capped at $100,000 annually for each employee)

How long do I have to apply?

You will need to apply with an an approved lender (like Security National Bank) by June 30, 2020. However, the program is also "first come, first served." So we encourage you to apply as soon as possible, before the funding runs out.

How long will it take to receive the money?

The length of time to receive your money will depend on how quickly the government's Small Business Administration (SBA) can process applications. The SBA hasn't given us a concrete turnaround timeline for application decisions. We do know that there is currently a high volume of applications and the likelihood of a decision within 24 hours is very slim.

Once you are approved by the SBA, you will be assigned an SBA loan number. Upon receiving this number, you will receive funds within 10 calendar days (if the end of this period falls on a weekend, or federal holiday, the final day will be the next business day.)

How much of my loan will be forgiven?

A portion or all of your loan may be forgiven if at least 75% of it is used for payroll costs during the 8-week period after you receive the loan (you can use up to 25% for mortgage interest/obligations, rent and utility payments, as listed above). Keep in mind that this applies to employees who make less than $100,000 per year; wages above this threshold will not be forgiven.

You will also owe money if you let go of any employees (or fail to hire them back, retroactive to Feb. 15); or decrease their salaries and wages by more than 25%. 

PLEASE NOTE: Forgiveness rules and guidelines, along with terms of repayment, are determined by the Small Business Administration — not the lending institution (like Security National Bank). As a borrower, you should understand that you may be required to pay back a portion or all of the loan your business receives.

How is unforgiven debt handled?

Any loan amounts not forgiven will be carried forward as an ongoing loan with a 2-year term and a 1% interest rate. There will be no prepayment penalty. In addition, all payments on principal, interest and fees will be automatically deferred for six months.

PLEASE NOTE: Forgiveness rules and guidelines, along with terms of repayment, are determined by the Small Business Administration — not the lending institution (like Security National Bank). As a borrower, you should understand that you may be required to pay back a portion or all of the loan your business receives.

What if my business has already laid off workers?

The PPP is retroactive to Feb. 15, 2020, in case your business needs to bring back workers who may have already been laid off.

How many loans can I take out under this program?

Only one.

Will debt forgiveness affect my tax planning?

No, forgiven indebtedness resulting from the PPP will not be viewed by the IRS as taxable income.

However, while the loan itself is not subject to taxes, the IRS has also stated that you will not be able to deduct the wages or other business expenses covered by a PPP loan on your organization’s next tax return (to prevent a “double tax benefit”).

PLEASE NOTE: Security National Bank is not a tax adviser company. There may be additional guidelines and information, regarding your organization’s tax situation, not included on this page. For more information, you should always contact your tax adviser or visit the IRS website.

More questions? Talk to us

 

PLEASE NOTE: Forgiveness rules and guidelines, along with terms of repayment, are determined by the Small Business Administration — not the lending institution (like Security National Bank). As a borrower, you should understand that you may be required to pay back a portion or all of the loan your business receives.