Paycheck Protection Program

The United States government recently passed the next round of the Coronavirus Aid, Relief and Economic Security (CARES) Act on April 23, 2020. This legislation establishes an additional $310 billion pool of funds that small businesses may access via the Paycheck Protection Program (PPP). Small businesses may apply for a PPP loan and may use the proceeds for a variety of purposes, including payroll costs, employee benefits, interest on mortgages, rent, and utilities.

If you wish to apply, please read the How to Apply section below. Owners of eligible businesses that are members of Addition Financial should click the Apply Now button. Non-member small business owners are welcome to apply by clicking the Join & Apply button.

By submitting a Payroll Protection Program (“PPP”) loan application to Addition Financial, the applicant acknowledges that possible forgiveness of the loan is subject to: a) the discretion of the SBA (which approves PPP loans) and b) the availability of funding. The applicant further acknowledges that funds for the PPP may be exhausted at any time and that the applicant may thus be unable to obtain a PPP loan and/or loan forgiveness. We cannot guarantee any particular outcome in securing PPP funding. With the significant volume of applications already submitted to Addition Financial and to other lenders, the likelihood of a new application receiving funding is very remote and unlikely.

Do not initiate an application until you have all of the necessary documentation. Incomplete applications will not be processed.

 

To view a complete guide prepared by the U.S. Chamber of Commerce, click here.

 


Overview of Paycheck Protection Program Loans:

 

  1. 1
    PPP loans have an interest rate of 1% and a term of two (2) years.
  2. 2
    No collateral or personal guarantees are required.
  3. 3
    No lender origination fees will be charged.
  4. 4
    PPP allows businesses to borrow up to $10 million to pay employees for up to 4 months.
    • The maximum loan amount is calculated by taking the borrower’s average eligible monthly payroll expense and multiplying it by 2.5.
    • Eligible payroll expense includes salaries, wages, and cash tips (up to an annualized level of $100,000 for an individual employee).
    • 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.
    • Eligible payroll expense also includes employee group health care benefits, insurance premiums and retirement contributions.
  5. 5
    The proceeds of the PPP loan can be used for the following:
    • Payroll costs such as salary, wages, payment of cash tips (up to an annual rate of pay of $100,000).
    • Employee group health care benefits, insurance premiums, retirement contributions, and covered leave.
    • Interest paid on mortgage (excluding any prepayment or payment of principal).
    • Rent or lease payments.
    • Utilities.
  6. 6
    Loan payments will be deferred for six months; however, interest will continue to accrue over this period.

 


What you need to know about the forgiveness provision

 

Forgiveness is based on the employer maintaining or quickly rehiring furloughed employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. 

  • Borrower must apply for forgiveness. Click here for the PPP loan forgiveness application.
  • Forgiven indebtedness resulting from the PPP will not be viewed by the IRS as taxable income.
  • Forgiveness may be in the amount used to pay payroll costs (including salaries and benefits), rent, utilities and mortgage interest during the eight (8) weeks following disbursement of the loan.
  • Treasury and SBA guidance requires 75% of forgiven amount to be used for payroll costs.

 


Eligible Small Businesses

 

Small businesses with 500 or fewer employees—including nonprofits, veterans’ organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors—are eligible. Businesses with more than 500 employees are eligible in certain industries. 

 


When to Apply

 

Eligible businesses may apply now. We encourage you to apply as quickly as you can. Our employees are working diligently to process all PPP applications that we receive. However, Addition Financial is not privy to the actual balance of remaining PPP funding. As such, your submission of a PPP application to Addition Financial does not guarantee that such application will be submitted to the SBA prior to the exhaustion of available PPP funding.

 


How to Apply

 

Below are checklists of items and information required to apply for a PPP loan based upon the type of business. Do not initiate an application until you have all of the necessary documentation. Incomplete applications will not be processed.

Click here when you are prepared to complete the entire application and submit your documentation.

 

Small Business Checklist:

  • Application (SBA Form 2483 (03/20)).
  • List all owners of Applicant with greater than 20% ownership stake. Include: name, title, ownership percentage, TIN (EIN, SSN), and address.
  • Articles of incorporation/organization.
  • By-laws/operating agreement.
  • Copies of payroll tax reports filed with the IRS (including Forms 941, 944, state income and unemployment tax filing reports) for the entire year of 2019 and first quarter of 2020 (if available). If report not available, Employee Pay Stubs as of February 15, 2020.
  • Breakout of wages by employee verifying any employee earning more than $100,000.
  • If applicable and available, copies of payroll reports for each pay period for the preceding 12 months.  Such reports should include gross wages including PTO (which include vacation, sick, and other PTO).This includes payroll reports through the pay period preceding the origination of the SBA loan.
  • If applicable and available, documentation reflecting the health insurance premiums paid by the company under a group health plan including owners of the company for the immediately preceding 12 months prior to the date of the SBA loan origination.
  • If applicable and available, documentation of all retirement plan funding by the employer for the immediately preceding 12 months.
  • A detailed profit and loss statement for the year ended 2019 and YTD 2020.
  • Copies of all owner’s Driver Licenses.
  • Date of Incorporation (per tax return).
  • Any current/prior SBA loan? If so, include when the loan was obtained and the current balance.
  • 501 C3/non-profit: SSN of the authorized Signer

 

Sole Proprietors, Independent Contractors and Eligible Self-employed Individuals Checklist:

  • Application (SBA Form 2483 (03/20))
  • Payroll tax filings reported to the IRS
  • Form(s) 1099-Misc.
  • Income and expenses from the sole proprietorship
  • Other documentation as determined by Lender.

 

Eligible payroll costs for either category of business include:

  • Salary, wages, commission, tips or compensation (up to $100,000/pp) as annualized for each person
  • Vacation, medical, family, parental or sick leave costs
  • Costs associated with losing an employee, like severance
  • Group health benefits, including premiums
  • Retirement benefits
  • State and local taxes on employee compensation

 


Additional Resource

 

Business owners who have financial issues may apply for the Florida Small Business Emergency Loan Program:  https://floridadisasterloan.org/application.

 


The Paycheck Protection Program is implemented by the Small Business Administration with support from the Department of the Treasury. 

Any information provided here is subject to change.

Additional funding may be approved for the U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) component of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or the “Act”).

For those of you that already submitted PPP applications to Addition Financial, but did not receive funding, our plan is to continue to work with you to submit your application to the SBA. Please be aware that any such additional funding may be depleted just as quickly as the first round. We understand that there are other PPP lender options available (including online platforms). If you have already applied through Addition Financial but have decided to apply through other sources (as we cannot guarantee any particular outcome in securing PPP funding), please let us know you wish to withdraw your application. At Addition Financial, our paramount concern is that the small businesses and entrepreneurs in our community get the financial assistance they need, whether with us or through other sources.

We anticipate any additional funding will be depleted, and we certainly share the hope of many small business owners and entrepreneurs that additional assistance—either in the form of a new round of funding to the existing PPP and/or new program(s)—will be forthcoming. However, we obviously have no control over any such additional funding or programs, and cannot provide any assurances or representations that they will come.