COVID-19 Update: Business
CommunityAmerica is committed to creating lasting relationships with the local business community and the individuals who work so hard to make them successful. We know there are many questions concerning COVID-19 and how it could potentially impact your business. We are a Small Business Administration (SBA) lender, and we are here to help you. Whether you are looking for SBA loans, payment deferment options, loan extensions or advice, our team will continue to support our local businesses.
Paycheck Protection Program (PPP) Status
UPDATE 4/28/2020: The SBA Paycheck Protection Program is accepting applications again. CommunityAmerica is actively working to submit all completed applications we've received. The SBA's website is the most reliable source for information: sba.gov. You can apply for PPP assistance here.
As a Small Business Administration (SBA) lender, we are participating in the Paycheck Protection Program. If you have questions, our business banking team is here to help. Give us a call at 913.905.7012. Or get additional details at the SBA website here.
To ensure your application can be expeditiously processed, please prepare the following documentation:
- Copy of Driver’s License for each 20%+ owner of the business
- 2019 Year-end Balance Sheet and Income Statement
- A list of the Names & SSNs for at least 90% of the ownership
- YTD Balance Sheet and Income Statement (through 2/29/20)
- Payroll Documentation can consist of Payroll Record - 941 Statement (preferred), an internally provided Payroll Summary Report, Payroll Tax Filings or Bank Statements. The documentation needs to provide the following details: list of employees, annual compensation and country of residence.
- 2019 Form 1040 Schedule C - this is required for independent contractors and self-employed individuals. Regardless if you’ve filed your 2019 tax return, this form is needed to substantiate the applied for PPP loan amount. A 2019 IRS Form 1099-MISC detailing non-employee compensation received (box 7), invoice, bank statement or book of record that establishes you are self-employed. You must provide a 2020 invoice, bank statement or book of record to establish you were in operation on or around February 15, 2020.
The loan amount for the Paycheck Protection Program is calculated using 2.5x your average monthly payroll costs. Qualified 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.
PPP Funds & Qualified Expenses
The Paycheck Protection Program (PPP) was created to help you keep your employees at their current base pay and cover other essential business costs. To be 100% forgiven, 75% of funds must cover payroll costs, while 25% can be used for other qualifying costs (like rent, leases and utilities) over an 8-week period starting the date the funds are received.
Any portion of your loan used for non-qualifying costs will not be forgiven, and you’ll be required to pay it back over 2 years at 1% interest.
The SBA defines qualifying costs as:
- Full-time and part-time employees (who live in the U.S.) compensation in the form of salary, wages, commissions or anything similar
- Cash tips or equivalent, based on employer records of past tips or reasonable, good-faith employer estimates if there are missing or no historical records
- Vacation, parental, family, medical or sick leave payments
- Healthcare coverage, including insurance premiums, and retirement
- State and local tax payments based on employee compensation
- Wage, commission, income or net earnings from self-earners or similar compensation
No more than 25% of funds can be used to cover:
- Costs related to group healthcare benefits during paid sick, medical or family leave as well as insurance premiums
- Mortgage interest payments (not including mortgage prepayments or principal payments)
PPP Loan Forgiveness
Funds covering qualified costs will be completely forgiven if at least 75% of the loan is used toward qualifying payroll costs. Any funds used for non-covered expenses WILL NOT be forgiven.
What costs DO NOT meet PPP loan forgiveness requirements?
The SBA has also defined non-qualifying costs, so do not count them towards your average monthly payroll. Also do not use your PPP loan to pay for the following:
- Employee compensation for workers whose main residence is outside of the U.S.
- Cash compensation for any individual employee in excess of an annual salary of $100,000 (prorated as necessary)
- Compensation for workers who receive 1099s instead of W-2s
- Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020 — this includes the employee’s and employer’s share of FICA and Railroad Retirement taxes and income taxes withheld from workers
- Qualified sick and family leave costs for which credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act
How to Apply for Loan Forgiveness
The SBA recently released the PPP Loan Forgiveness Application which includes further information and resources to help make sure you qualify. In a nutshell, forgiveness is based on maintaining, or quickly rehiring, employees and salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
The loan forgiveness form and instructions feature several measures to reduce compliance burdens and simplify the forgiveness application process, including:
- Options for calculating payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles, such as a biweekly or more frequent payroll period (if utilizing an alternative payroll covered period, no supplement payrolls are necessary)
- Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving the PPP loan
- Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
- Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
- Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined
You can start the application here. As more details continue to become available, we'll update the information here.
The Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was signed into law on Friday, March 27, 2020. The act includes several programs to assist eligible businesses with the support they need to sustain payroll and pay other expenses during this unprecedented time. The SBA website provides the most current and accurate information on each new government program. Program details are changing frequently, and we are working continuously to provide the most timely and helpful information available.
Economic Injury Disaster Loans and Loan Advance
Offers low interest loans to small businesses located in a declared disaster zone to help overcome the temporary loss of revenue they may be experiencing. Get the details.
SBA Debt Relief
Under the CARES Act, existing SBA borrowers whose loans are in good standing are relieved of any obligation to pay principal, interest and associated fees due after March 27, 2020 for a period of six (6) months. If you have a SBA loan with CommunityAmerica, your banker will be contacting you with additional information. Additional details are available through the link. Get the details.
SBA Express Bridge Loans
For current CommunityAmerica small business members who have an urgent need for cash while they wait for a decision and payment of an Economic Injury Disaster loan. Get the details.
Women's Business Center
Partially funded by the Small Business Administration, this organization provides support to women business owners in the Kansas City metro. Resources are available on their website, including accessing needed capital. They also provide free counseling by phone at (913) 492-592 and email at [email protected].
As your truly and forever local partner, we are here for you during this uncertain time. You can reach us at 913.905.7000.