Updated 08/06/20 4:08 PM
Please Note: These are new programs being implemented in real time, and may change frequently. Please check back for updated information.
Use the following links to skip to the relevant section:
Find your local SBA Field Office at: https://www.sba.gov/tools/local-assistance/districtoffices
Paycheck Protection Program (PPP)
- Frequently Asked Questions For Loan Forgiveness (Released 8/4/20)
- Summary of PPP lending as of 7/31/20 (Released 8/3/20)
- Updated Interim Ruling (6/24/20)
- New EZ Forgiveness Application (6/17/20)
- New Full Forgiveness Application (6/17/20)
Note: The EZ application requires fewer calculations and less documentation for eligible borrowers. Details regarding the applicability of these provisions are available in the instructions to the new EZ application form.
Both applications give borrowers the option of using the original 8-week covered period (if their loan was made before June 5, 2020) or an extended 24-week covered period. These changes will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan.
The Paycheck Protection Program and loan forgiveness is intended to provide economic relief to small businesses that have been affected by the COVID-19 pandemic.
We are currently encouraging many of our in-business clients to apply for the PPP. Start by talking to your commercial bank; most banks are prioritizing current customers. If you don’t have a commercial banking relationship, or your bank isn’t doing PPP loans, you can find a lender here from the list below.
You can apply for a loan that is up to 2.5 times your historic average monthly payroll costs. This loan will be forgivable if, for an eight week period following loan disbursement, you demonstrate that you: have maintained historic payroll levels; and used at least 75% of the loan proceeds for payroll and the other 25% for the rent payments, utility payments, or mortgage interest.
If not forgiven, the PPP converts to a 2-year term at 1% interest. You do not have to make any payments in the six months after the loan is disbursed, though interest will accrue during this time.
The SBA and banks are working to close these loans as quickly as possible.
Paycheck Protection Program Flexibility Act of 2020
Covered time period extended—The period of time to use loan money has been extended from 8 to 24 weeks. This means that you have more time to apply funds to qualified expenses that maximize loan forgiveness.
Payroll threshold adjusted—Originally, the Treasury and the SBA determined that 75% of a PPP loan had to be used for payroll in order for the loan to be forgiven. The 75% threshold has been adjusted to 60%. Loan forgiveness will only be granted if 60% of funds are used for payroll. This could still be subject to change; we will keep you posted.
Safe harbor date extended—The original Cares Act included safe harbor exceptions to restore, or attempt to restore, full-time employees and any pay reductions by June 30, 2020. These exceptions still exist, but the date to restore headcount has been adjusted to December 31, 2020.
Headcount reduction exception — Forgiveness will be determined without regard to the headcount penalty if your business can document that it is unable to return to the same level of business activity as prior to February 15, 2020, due to compliance with public health guidance or requirements from the CDC, OSHA, or DHHS, relating to sanitation, social distancing, or worker or customer safety requirements during the period between March 1 December 31, 2020. Additionally, borrowers are exempted from the headcount penalty if they are able to document both (i) an inability to rehire employees who were employed as of February 15, and (ii) an inability to hire similarly qualified employees for unfilled positions on or before December 31. We will need the Treasury and SBA to clarify what documentation will be required to claim these exemptions.
Loan payment deferral extended—The original 6-month deferral for repayment of PPP loans has been extended to 10 months. Payments are only required on the amount of the loan that is not forgiven.
Loan term date extended—All new PPP loans effective after the creation of this law will have a five-year term. Businesses that received a loan prior to the new legislation can adjust the loan term from two to five years. Individuals will need to work with their lender to amend loan terms.
Social Security payments deferred—Originally under the Cares Act, employers who received the PPP Loan could not also defer employer social security tax payments. Now, any employer with social security payments due between March 27, 2020 and December 31, 2020 can pay half of the amount due by the end of 2021 and the remainder by the end of 2022.
- You cannot apply for the PPP through CEI. You must apply through your bank or credit union.
- The interest rate for loans is 1% (had previously been stated as 0.5%)
- The loan term is two years
- All payments are deferred for six months. However, interest will continue to accrue during this time.
Find a bank lender by zip code
More information about PPP from the U.S. Department of the Treasury
Am I eligible to apply for the PPP?
You are eligible for a PPP loan if you have 500 or fewer employees whose principal place of residence is in the United States, or are a business that operates in a certain industry and meet the SBA employee-based size standards for that industry. Also eligible are nonprofit and veterans’ organizations that have been negatively affected by the pandemic.
When should I apply for the PPP?
Apply as soon as possible starting April 3, 2020. PPP funds are limited. While the last day to apply for and receive a loan is June 30, 2020, it is possible that the federal funding source will run out soon due to the widespread needs of millions of businesses nationwide. Funding is being allocated on a first-come, first-served basis.
How do I apply?
The application for the PPP is on the U.S. Small Business Association (SBA) website. Click this link to access the application. You will need to download the application and fill it out.
I’m self-employed, a solo-preneur. Can I apply for PPP?
Yes. You are also eligible for a PPP loan if you are an individual who operates under a sole proprietorship or as an independent contractor or eligible self-employed individual. The PPP application will go live on Friday, April 10, for independent contractors and self-employed individuals. You will need to know your net income as reported on line 31 of your Schedule C.
How much can I borrow?
The size of the loan available to a business depends on the size of a business’s payroll. Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. That amount is subject to a $10 million cap. If you are a seasonal or new business, you will use different applicable time periods for your calculation. Payroll costs will be capped at $100,000 annualized for each employee. Follow the instructions on the application to calculate the loan amount you are eligible for.
What do I do once I’ve filled out the application?
You will need to give the application to your bank. Once you are approved for a loan, the lender must make the first disbursement of the loan no later than ten calendar days from the date of loan approval. The eight-week period begins on the date the lender makes the first disbursement of the PPP loan to the borrower.
You do NOT have to re-open, but are expected to start paying employees again. The goal is to get employees back on the payroll even if they are not able to be at work, so they get all the benefits of being on a normal payroll (insurance, 401k, etc.) that they do not get on unemployment. The date to have employment numbers back to pre-disaster levels is June 30th to get loan forgiveness.
Can my PPP loan be forgiven in whole or in part?
The loan will be forgiven if loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and
- Employee and compensation levels are maintained.
- Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
Loan payments will be deferred for 6 months.
You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. You will also owe money if you do not maintain your staff and payroll.
- Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount.
- Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
- Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.
Do I have to apply for PPP through my bank/lender?
How many times may I apply for this loan?
You can only apply for the loan one time. During the period beginning on February 15, 2020 and ending on December 31, 2020, you cannot receive another loan under the Paycheck Protection Program.
How do you define payroll/ employees?
Payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of:
- salary, wages, commissions, or similar compensation;
- cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips);
- payment for vacation, parental, family, medical, or sick leave;
- allowance for separation or dismissal;
- payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement;
- payment of state and local taxes assessed on compensation of employees;
- and for an independent contractor or sole proprietor, wage, commissions, income, or net earnings from self-employment or similar compensation.
I operate a seasonal business. Am I eligible to apply if the season hasn’t started yet?
For seasonal businesses, the Applicant may elect to use average monthly payroll for the time period between February 15, 2019 and June 30, 2019, excluding costs over $100,000 on an annualized basis for each employee.
I just opened a new business in the new year. Am I still eligible to apply?
For new businesses, average monthly payroll may be calculated using the time period from January 1, 2020 to February 29, 2020, excluding costs over $100,000 on an annualized basis for each employee.
What information do I need to provide?
You’ll need to submit documentation to show that you are eligible, such as payroll processor records, payroll tax filings, or Form 1099-MISC, or income and expenses from a sole proprietorship. If you don’t have that information, you must provide other supporting documentation, such as bank records, sufficient to demonstrate the qualifying payroll amount.
- You will need to have payroll records from February 15, 2019 to June 30, 2019 if you were in business during that time period.
- You will need payroll records from March 1, 2019 to June 30, 2019 if your business employs seasonal workers (yes, this period doesn’t really mesh with Maine’s summer tourism season, but this is the guidance that’s been given nationally)
- You will need payroll records from January 1, 2020 to February 29, 2020 if you were NOT in business between February 15, 2019 and June 30, 2019.
What counts as payroll?
- Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
- Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
- State and local taxes assessed on compensation; and
- 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.
More information on how to calculate your loan amount
Verrill Dana interpreted the federal ruling to provide advice on how to calculate the loan amount you can apply for. You can access that information here.
Federal Guidance on the Payroll Protection Act
For more detailed information, review the federal ruling through the U.S. Treasury Department here.
SBA Economic Injury Disaster Loans
To further meet the needs of U.S. small businesses and non-profits, the U.S. Small Business Administration reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19 as of 6/15/20.
The portal will be opened for a limited period, and it is recommended that you apply as soon as possible. The link to the portal will be:
If you have already applied under the streamlined application (March 30th to program closure), there is no need to re-apply.
SBA ECONOMIC INJURY DISASTER LOAN (EIDL)
The EIDL program is intended to help small businesses overcome temporary loss of revenue due to the COVID-19 pandemic. You can still apply for the SBA EIDL loan. You can apply here. We’ve learned a few things about the EIDL program in the past week or so.
1. The Emergency Advance that has been so anticipated has been clarified to be $1,000 per employee, and up to a TOTAL of $10,000 per business. This advance does not have to be repaid.
2. Lacking a clear definition in the rule-making, we are encouraging all clients to count themselves as an employee for the purposes of the EIDL loan AND the PPP.
3. If you applied before the advance was an option, you will need to reapply for the loan to trigger the advance.
4. The timeline on the advance is now being stated as 7 – 10 days, though we have not seen any money come through yet.
5. The process has been greatly streamlined, and now takes about 20 minutes for the initial application.
This is a 3.75% loan (for businesses, non-profit rate is 2.75%) with a term of up to 30 years, though terms may be shorter. You do not have to make any payments on this loan for 12 months after it is closed.
The U.S. Small Business Administration (SBA) approved Governor Mills’ application for SBA Economic Injury Disaster Loans to help Maine businesses overcome any temporary loss of revenue due to the novel coronavirus, otherwise known as COVID-19 on March 16th. Maine is one of the first states in the country to be approved, and Maine small business owners can now begin applying for these loans.
To apply or learn more about the SBA Economic Injury Loans, visit https://www.sba.gov/funding-programs/disaster-assistance or https://disasterloan.sba.gov/ela/
(Firefox or Internet Explorer preferred browser for applications. Issues with Chrome and Safari.)
FAQs REGARDING PPP & EIDL
Can I apply for both programs?
Yes, you can apply for the PPP and the EIDL program. You must use them for different purposes. For example, EIDL could be used for rent payments while PPP covers payroll.
- If you get an EIDL advance, that amount will be subtracted from the forgivable amount of the PPP.
- If you got an EIDL loan between 1.1.20 and 4.3.20 and you used that loan for payroll costs, your PPP loan will refinance your EIDL loan.