The Paycheck Protection Program for business recovery
The Federal Government's Coronavirus Aid, Relief, and Economic Security (CARES) Act is an emergency relief program created to help businesses recover.
What can I use the loan for?
Expenses such as:
- Payroll* (These include: salary, wages, commissions, or tips; employee benefits, including vacation, parental, family, medical, or sick leave; allowances for separation or dismissal; group health care benefits, including insurance premiums; retirement benefits; state and local taxes assessed on compensation)
- Mortgage interest
- Lease payments (commercial real estate only, does not include equipment or vehicles)
- Group healthcare benefits
- Interest on existing debt
- Additional efforts to retain employees
What are the terms of the loan?
- Borrow up to 2.5x monthly payroll costs from the previous year end
- 6-month deferment
Loan availability Through June 30, 2020 Rate & term 1.0% Fixed Rate, 2 Year Term
No personal guarantees or collateral required
Forgiveness qualifications: Eligible expenses during eight weeks after loan origination which include:
- Payroll costs with a maximum per-employee salary of $100,000
- Mortgage interest, rent, and utilities payments made prior to February 15, 2020
- Additional specific details and guidance to be provided by the SBA
Not included in forgiveness
- Costs related to continuation of group health care benefits during sick, family or medical leave
- Insurance premiums
- Interest on any other debt obligation incurred before February 15, 2020
What are Loan Calculation Documents?
You must provide documentation supporting how you calculated the requested loan amount. In some cases where a business uses a payroll processing company (i.e. ADT or CPS), the payroll company has been providing this documentation.
How long does it take for an application to be approved, closed, and funded?
The loan approval may take up to 10 business days from the time a completed credit application is submitted, and an additional 2 to 4 business days for the loan to close and fund.
Completed applications are subject to SBA approval and funds are contingent upon availability of the federal PPP, which is finite and subject to a cap. It is extremely important that the application is complete, including all supporting documentation. We cannot submit an incomplete application to the SBA for approval. Please contact your Webster Business Banker or call 800-325-2424 to apply.
PPP loan forgiveness
If you received your Small Business Administration (SBA) Paycheck Protection Program (PPP) Loan proceeds, you’re likely considering the next step of the PPP process by applying for loan forgiveness from the SBA.
The Paycheck Protection Program Flexibility Act provides additional flexibility within the forgiveness component of the Act. The changes include:
- Creating greater flexibility on the use of Loan funds. For example, lowering the required Loan Amount percentage that must be spent on payroll-related costs from 75% to 60%
- Lengthening the Covered Period businesses have to use the Loan proceeds from 8 weeks to 24 weeks
- Extending the June 30 deadline to rehire workers until December 31, 2020
These and other changes may impact the timing for you to apply for forgiveness.
Webster’s Small Business Administration PPP forgiveness application process will be available soon, pending additional guidance from the Treasury and the SBA.
* Payroll costs are capped at $100,000 per employee.
All loans and lines are subject to credit approval.