Paycheck Protection Program
Last updated: April 20, 2020
Important: The SBA has committed all of the initial round of funds from the Paycheck Protection Program*. Even though the SBA is not accepting applications at this time, First FarmBank is continuing to process all previously submitted applications, given that Congress is considering a new round of funding for this critical program. First FarmBank will also accept new applications in anticipation of this second round of funding under the Paycheck Protection Program. *Subject to SBA approval. Restrictions may apply. Contact a banker for full details.
The Paycheck Protection Program is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The program intends to provide American small businesses with eight weeks of cash-flow assistance through 100 percent federally-guaranteed loans.
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Program highlights:
- Funding is meant to help retain workers, maintain payroll and cover rent/mortgage, insurance and/or utility expenses
- A portion of the loan may be forgiven (if you follow SBA requirements)
- SBA loan forgiveness may be contingent on providing additional documentation regarding the usage of the funds that were disbursed
- No personal or business collateral is required
Is my small business eligible?
Most likely, yes. Small businesses, sole proprietorships, independent contractors and self-employed individuals may all qualify though different types of businesses require different types of documentation during the application process.
Other details:
The maximum loan size will be determined by a formula that limits the loan to a maximum of 2.5 times the average monthly salary and wages paid in the prior year, up to a maximum of $10 million.
Eligible uses of the funds include covering payroll, mortgage interest, rent, utilities and insurance expenses. The program does include a provision where some of the loan balance might be forgiven. Loan forgiveness will be limited to 8 weeks of payroll expenses incurred following receipt of the Paycheck Protection Program funds.
Staff and the SBA are working diligently to create the rules, application forms, and provide guidance on how to implement this program and is expected to complete this process by the end of this week (April 3, 2020). Once the guidance is published and SBA and bank staff are trained on the new program, banks will then be able to start accepting applications. Until then, we ask for your patience as this program is in the process of being implemented. If you would like us to notify you once the program is open for applications, please contact your local branch or call 970-346-7900.
We strongly encourage applicants to review the program requirements and borrowers guide provided by the SBA.
If you're considering applying for the Paycheck Protection Program:
We expect applications to become available for the Paycheck Protection Program on Friday, April 3, 2020. To help with the application process, please begin to gather the following information:
- Average full time equivalent employee (FTE) figures for each month of 2019
- Total payroll and payroll-related expenses for each month of 2019
- Current and expected monthly FTE and payroll expenses for 2020
*This is a rapidly evolving situation. Information provided is believed accurate as of the time of publication and is First FarmBank's interpretation of the material that has been provided thus far by the US Treasury Department and the Small Business Administration. First FarmBank will continue to closely monitor these programs and will update information as new details become available. The Paycheck Protection Program and Economic Injury Disaster Loan program are both governed by the SBA. For complete details, please refer to their website: https://www.sba.gov/.
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