Paycheck Protection Program Updates

Paycheck Protection Program Updates

Consistent with SBA guidance, Wacif has temporarily stopped processing new PPP applications through its partnership with CustomersBank, effective immediately.

The content below includes resources to help small businesses prepare for PPP participation. Please continue to visit this page regularly, as it will be updated frequently.

What You Need to Know:

  • The PPP Extension Act of 2021 extends the loan deadline by two months from March 31 to May 31
  • Borrowers can set their loan covered period to be any length between 8 and 24 weeks to best meet their needs
  • Loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, & worker protection expenditures
  • The Program’s eligibility is expanded to include 501(c)(6)es, housing cooperatives, direct marketing organizations, among other types of organizations
  • Eligibility requires a 25% quarterly reduction in revenue from 2019 – 2020  (learn more)
  • Greater flexibility for seasonal employees
  • Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount
  • Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan
  • The enactment of the Economic Aid Act

Start Preparing Today

What can you do to get a jump start on your PPP application? Begin preparing the paperwork and documentation below. While the requirements are subject to change, we recommend compiling your paperwork and documentation to help ensure a timely and seamless PPP application process.

  • Review the resources made available to you below, assemble your application, and direct your questions either to resources referenced in the documents or ppp@wacif.org.
  • Attend PPP preparation webinars or tune into existing PPP loan application webinar recordings (see below).
  • To begin your PPP application, complete one of the following forms:
  • Determine how you will demonstrate a 25% quarterly reduction in revenue from 2019-2020, and prepare your interim financial statement, which should include a profit and loss statement, and your balance sheet (learn more).
  • Prepare your payroll expensive verification documents:
    • IRS Quarterly 940, 941, and 944 payroll tax reports
    • Payroll Processing Reports (CARES ACT REPORT) 2019 and YTD 2020 with corresponding bank statements. Please note that the YTD 2020 should include a listing of compensation of individual employees exceeding $100,000 annual salary. If the Payroll Processing Report is not available, assemble the 8-24 weeks of employee pay stubs for the covered period selected.
    • Include the breakdown of employee benefits.
  • Most recent mortgage statement or rent statement (copy of executed lease)
  • Most recent utility bills
  • Documentation of all company expenses and interest payments
  • Completed and signed IRS 4506-T Tax Transcript Forms on the business/organization and the principal owner(s).
  • Articles of Incorporation(s)/Organization(s)
  • By-Laws/Operating Agreement(s)
  • Copies of driver’s licenses of all owners/Guarantors/authorized signers
  • If applicable, 2019 Tax Returns including Schedule C, 10-99 Miscellaneous Forms, and 2019 and YTD 2020 income and expenses. This is necessary for self-employed individuals, independent contractors, and sole proprietors.

SBA Resources:

Updated First Draw Forms

Second Draw Forms

Guidance & Resources

For more information and updates, visit SBA.gov/PPP or Treasury.gov/CARES

Additional Resources

Frequently Asked Questions 

What is the Paycheck Protection Program (PPP)? 

The Paycheck Protection Program is a loan designed to provide a direct incentive for small business to keep their workers on the payroll. The program was created in response to the economic crisis resulting from the COVID-19 pandemic.

Why has Wacif partnered with Customers Bank and SmartBiz to Offer the Paycheck Protection Program Loan?

UPDATE: Consistent with SBA guidance, Wacif has temporarily stopped processing new PPP applications through its partnership with CustomersBank and SmartBiz, effective immediately.

What is the maximum amount of financial relief I can apply for? 

The maximum amount of the loan is the lesser of two and a half months of your businesses’ average monthly payroll costs in 2020 or 2019, with a cap at $2 million. Self-employed entrepreneurs (sole-proprietors and independent contractors, etc.) also have the option to use the precise 1-year period before the date on which the loan is made. Borrowers with NAICS code beginning with 72 at the time of disbursement can use 3.5 months of payroll costs.

Will my loan be forgiven? 

The SBA will forgive all of the First Draw and Second Draw PPP Loans if all employee retention criteria are met, and the funds are used for eligible expenses.

Can I apply if I owe the IRS outstanding debts?

Yes, you can still apply if you have outstanding debts, and there are no known penalties for PPP loan recipients with outstanding tax debt. You do need to make sure you are filed up through 2019, however, and if you owe taxes, you should file, and then work on starting a payment plan with the IRS, or start the process for an Offer in Compromise (OIC).

What is the difference between a First Draw Borrower and Second Draw Borrower? 

If you are seeking PPP funds for the first time and meet the requirements, you are eligible as a First Draw Borrower. You may apply as a First Draw Borrower if you were denied a loan during the first round and meet the requirements. If you previously received a PPP loan, you may be eligible for a second loan, known as the Second Draw PPP Loan.

Can I apply as a new First Draw Borrower? 

$35 billion has been set aside for new first draw borrowers, and $15 billion is dedicated to smaller, first-time borrowers with 10 or fewer employees, or loans less than $250,000 in low-income areas.

Am I eligible as a new First Draw Borrower? 

To qualify as a First Draw Borrower, you need to identify as one of the following entities affected by COVID-19:

      1. Are a small business that meets SBA’s size standards (have 300 or fewer employees, unless you’re a business that satisfies the North American Industry Classification System (NAICS) code beginning with 72 or an eligible news organization with more than one physical location).
      2. Sole proprietors, independent contractors, and self-employed persons
      3. Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
      4. Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
        • 500 employees, or
        • That meets the SBA industry size standard if more than 500

Do I qualify for a Second Draw PPP Loan?

To qualify for a Second Draw PPP Loan, you must meet the following five requirements:

      1. You’re a business, independent contractor, eligible self-employed individual, sole proprietor, nonprofit organization, eligible for a First Draw PPP Loan, veteran’s organization, Tribal business concern, housing cooperative, small agricultural cooperative, eligible 501(c)(6) organization or eligible nonprofit news organization that:
      2. Has 300 or fewer employees, unless you’re a business that satisfies the North American Industry Classification System (“NAICS”) code beginning with 72 or an eligible news organization with more than one physical location.
      3. Experienced a revenue reduction of 25% or greater in 2020 relative to 2019
      4. Received a First Draw PPP Loan
      5. Have used, or will use, the full amount of the First Draw PPP Loan on or before the expected date on which the Second Draw PPP Loan is disbursed to the borrower

What can the proceeds be used for? While payroll should be the major use of the loan, the following purposes also apply:

  • Payroll
    • Paid leave (vacation, family, medical or sick leave not covered by the Families First Coronavirus Response Act)
    • Gross salaries and wages
    • Tips
    • Gross commissions
    • Allowances for dismissal or separation paid
    • Employee benefits costs (including retirement contributions)
    • 1099 contractors are NOT eligible for payroll benefits
  • Mortgage interest
  • Rent/lease
  • Utilities

Can you use PPP Funds to pay yourself?

Only self-employed individuals can pay themselves with PPP funds, by claiming their owner compensation replacement (in other words, you cannot give yourself a raise).

How can I calculate the 25% reduction requirement?

You can calculate this in a few ways:

      1. You can compare quarterly gross receipts for one quarter in 2020 with gross receipts for the corresponding quarter of 2019.
      2. You can compare the annual receipts from all four quarters in 2020 and 2019.
      3. If you were only in operation for the fourth quarter in 2019, and have gross receipts in any quarter in 2020 that demonstrate a 25% reduction from the fourth quarter of 2019.
      4. If you were not operating in 2019, but were operating before February 15th, 2020, and have gross receipts during the second, third, or fourth quarter of 2020 demonstrating a 25% reduction from the first quarter.

How does the SBA’s define “gross receipt”? 

The SBA defines gross receipts as “all revenue in whatever form received or accrued from whatever source reduced by returns or allowances.” Sole proprietors, independent contractors, or self-employed individuals can refer to “gross income” on your Schedule C. Everyone else should refer to “total income” plus costs of goods sold, excluding net capital gains or losses.

What is the Economic Aid Act?

The SBA is addressing potential barriers in accessing capital made available through the Paycheck Protection Program capital for minority, underserved, veteran, and women-owned small business concerns. Congress has set aside funds for new and smaller borrowers, borrowers in low-and-moderate-income communities, and for community and smaller lenders. Learn more about the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act (Economic Aid Act) here.

Why did the SBA add a demographic reporting section on the PPP borrower application? 

The SBA is encouraging borrowers to report the optional demographic information to better inform lenders and SBA on the success of the program, to help ensure the program is reaching underserved, minority-owned, veteran-owned, and women-owned businesses. Responses will help inform the SBA’s outreach efforts moving forward.

How can I apply? 

UPDATE: Consistent with SBA guidance, Wacif has temporarily stopped processing new PPP applications through its partnership with CustomersBank and SmartBiz, effective immediately.

When can I start my application? 

UPDATE: Consistent with SBA guidance, Wacif has temporarily stopped processing new PPP applications through its partnership with CustomersBank and SmartBiz, effective immediately.

How can I prepare my application? 

You can begin preparing your application by downloading the PPP borrower application forms to see the information that will be requested from you when you apply: