Payroll Protection Plan FAQ

United States Small Business Administration + Signature Bank of Arkansas

Payroll Protection Plan

Frequently Asked Questions

How much money am I eligible for?

Loans can be up to 2.5 x the borrower’s average monthly payroll costs, less excluded payroll costs, not to exceed $10 million.

What can I use the money for?

  • Payroll costs (using the same definition of payroll costs used to determine loan eligibility)
  • Interest on the mortgage obligation incurred in the ordinary course of business
  • Rent on a leasing agreement
  • Payments on utilities (electricity, gas, water, transportation, telephone, or internet)
  • For borrowers with tipped employees, additional wages paid to those employees
  • The loan forgiveness cannot exceed the principal

What is included in payroll costs?

  • Employee salary, wage and commissions
  • Payment of cash tips
  • Payment of vacation
  • Parental, family, medical or sick-leave
  • Allowance for dismissal or separation
  • Payment required for group health benefits (including insurance premiums)
  • Payment of retirement benefits or payment of state or local tax assessed on employee compensation
  • Sole proprietor income or independent contractor compensation not in excess of $100,000 (pro-rated for the applicable period)

Are there any payroll cost exceptions?

Eligible payroll costs do not include employee compensation above $100,000 (pro-rated for the applicable period), federal employment taxes imposed or withheld taxes; compensation to an employee whose principal residence is outside of the U.S.

How can I qualify for loan forgiveness?

Only certain costs incurred and payments made during the eight-week period following the date of the loan are eligible for forgiveness, including the following:

  • Payroll costs
  • Interest payments on mortgage obligations (not including prepayments or payments of principal)
  • Rent paid pursuant to a leasing agreement in existence before February 15, 2020
  • Utility costs paid for electricity, gas, water, transportation, telephone or internet access for which service began prior to February 15, 2020

Are there any limitations for forgiveness?

Total forgiveness costs cannot exceed the principal amount of the loan. Additionally, the total forgivable costs are reduced by a statutory formula if the business fails to employ its normal workforce of full-time employees (“FTEs”) during the eight-week period.

How can the forgiveness be reduced?

The amount of loan forgiveness calculated above is reduced if there is a reduction in the number of employees or a reduction of greater than 25% in wages paid to employees.

How will I apply for forgiveness?

The borrower must apply to the lender for loan forgiveness with supporting documentation. Accordingly, borrowers must practice detailed accounting and maintain complete and accurate record keeping in order to take advantage of these provisions

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