Paycheck Protection Program
Keeping Americans Working
Get the support small businesses need
to over come COVID-19
Because right about now we all could use a little help
As a Preferred SBA Lender, LCA Bank may be able to assist your company to access the available funding to sustain your business during the disruption caused by the COVID-19 restrictions.
The Paycheck Protection Program (PPP) portion of the CARES Act will provide banks and other eligible lenders with the authority to make a loan available to your company in an amount equal to 2 ½ times your average monthly payroll.
Your average monthly payroll
no closing cost or fees
1% interest rate
with 6 months deferred
payroll, rent, utilities, insurance premiums, mortgage interest
The latest information on the PPP is available on the SBA website; the link can be found at the bottom of this page.
Here is a summary of the PPP for quick consumption:
- Covered loan period: February 15, 2020, to June 30, 2020. You must submit an application during this period to qualify.
- Eligible for companies with 500 employees or less OR, the SBA standard for a given industry that allows for greater than 500 (see sba.gov) between February 15, 2020, and June 30, 2020 (the “covered period”).
Waiver of SBA Affiliation Rules – During the covered period, the provisions applicable to affiliations under SBA regulations are waived with respect to eligibility for a covered loan for the following businesses:
- Any business with not more than 500 employees that, as of the date on which the covered loan is disbursed, is assigned a NAICS code beginning with 72;
- Any business operating as a franchise assigned an SBA franchiser code; and
- Any business that receives financial assistance from a company licensed under section 301 of the Small Business Investment Act
If you would like more information regarding SBA affiliation rules, click here.
- Loan purpose: may be used for payroll, rent, utilities, insurance premiums, mortgage interest.
- The loan amount is calculated by taking your average monthly payroll over the past year and
- multiplying it by 2.5. For instance, a loan beginning April 1, 2020, would be based on the average monthly payroll from April 1, 2019, to March 31, 2020. If that number was $75,000 for example, your total loan amount would be $187,500. The PPP loan maximum is $10 million.
- Payroll costs include salary, wage, commission or similar compensation; cash tips or equivalent; vacation, parental, family, medical or sick leave; an allowance for dismissal or separation; health care benefits, including insurance premiums; retirement benefits; or State and local taxes on compensation. Note: Eligible payroll costs do not apply to employees with a principal place of residence outside the United States, and cannot include annual compensation above $100,000 for employees, sole proprietors or independent contractors.
- “Employee” means full-time, part-time or another basis
- No personal guarantees or collateral requirements
- Interest rate 1%
- No prepayment penalty may be charged
- Loan Forgiveness: A portion of the loans would be forgiven for costs incurred before February 15th and paid after the loan was secured. Those costs may include payroll and compensation expenses, rent or mortgage payments, utilities, and debt service payments. Businesses could receive up to the total amount of the loan but forgiveness would be proportional based on how many employees you retained compared to pre-COVID-19 levels. If you rehire workers previously laid off, you will not be penalized for having to reduce your payroll at the beginning of the period.
The SBA also offers an Economic Injury Disaster Loan (“EIDL”) that may be of benefit to your company. The SBA is the lender for these types of loans and there are specific requirements that must be met to qualify. Please visit DisasterLoan.SBA.gov for additional information and to determine which loan is the best fit for your company. If you have applied for one of these loans or are in the process of applying it is possible you may be restricted from accessing the PPP funds.
We know that the health and well-being of your employees and their families are of great importance to you as a business leader. As your partner in financing, the condition of your business is important to all of us at LCA and we want you to know that we are here to help.