Please note that Simmons is continually working to update our resources as new information becomes available.
What is the Paycheck Protection Program (PPP)?
PPP is a quick relief loan program aimed at helping businesses impacted by the coronavirus. All loan terms will be the same for everyone. This is an SBA 7(a) loan with the following terms:
- Loans can be for up to two months of your average monthly payroll costs from the last year, plus an additional 25% of that amount. The amount is subject to a $10 million cap. If you are a seasonal or new business, you will use different applicable time periods for your calculation. Payroll costs will be capped at $100,000 annualized for each employee.
- There is a 1% fixed rate.
- There are no loan fees.
- There are no payments on your loan for the first six months (interest will accrue over this period).
- The remaining balance after qualifying loan forgiveness will be paid on a two-year term. There are no prepayment penalties or fees.
- Up to 100% of the principal amount is eligible for potential loan forgiveness.
- No collateral or personal guarantees are required.
Am I eligible for the loan?
All businesses – including nonprofits, veterans’ organizations, tribal business concerns, sole proprietorships, self-employed individuals and independent contractors – with 500 or fewer employees can apply for a PPP loan. Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries.
What are the approved ways I can spend the money?
Approved uses of proceeds include:
- Employee salaries, wages, commissions or tips (capped at $100,000 on an annualized basis for each employee).
- Employee benefits, including costs for vacation, parental, family, medical or sick leave, allowance for separation or dismissal, payments required for the provisions of group health care benefits (including insurance premiums) and payment of any retirement benefit.
- State or local tax assessed on compensation.
- For a sole proprietor or independent contractor: wages, commissions, income or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.
- Rent and utilities (lease agreements and utilities services must have been in place before Feb. 15, 2020).
- Interest payments on mortgages incurred before Feb. 15, 2020, not principal payments.
Can I apply for both an economic injury disaster loan (EIDL) and PPP?
Yes. For an EIDL, you must apply directly through the SBA.
What information do I need to provide to apply for PPP?
To expedite the application process, we encourage you to gather the following items:
- Articles of Incorporation/Organization and Bylaws or Operating Agreement, evidencing the fact that you were in operation on Feb. 15, 2020.
- Payroll Tax reports (forms 941 for the past four quarters and 1099s) for the previous 12 months.
- Historical tax returns for three years on business. If the 2019 tax return is not available, please provide a balance sheet and profit and loss statement dated Dec. 31, 2019.
- The number of full-time equivalent employees as of Feb. 15, 2020.
What parts of the loan are eligible for forgiveness?
The loan amounts will be forgiven, provided that two conditions are met:
- The funds are used to cover payroll costs, mortgage interest, rent and utility costs over the eight-week period after the loan is made.
- Employees and their compensation levels are maintained.
When can I apply?
- Starting April 3, 2020, small businesses and sole proprietorships can apply.
- Starting April 10, 2020, independent contractors and self-employed individuals can apply.
What do I need to apply?
You will need to complete the PPP loan application for small businesses and sole proprietorships or the PPP loan application for independent contractors and self-employed individuals and submit it with required documentation to an approved lender by June 30, 2020. Submit an inquiry form to have a Simmons banker or SBA specialist help you get started.
How long will this program last?
Although the program is open until June 30, 2020, we encourage you to apply as quickly as possible.
How many loans can I take out under this program?
How much of my loan will be forgiven?
You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent and utilities payments during the eight weeks after receiving the loan. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. You will also owe money if you do not maintain your staff and payroll. Keep in mind the following:
- Your loan forgiveness will be reduced if you decrease your full-time employee headcount.
- Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
- You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between Feb. 15, 2020 and April 26, 2020.
How can I request loan forgiveness?
Your Simmons banker will work with you to submit a loan forgiveness request. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent and utility payments.
What do I need to certify?
As part of your application, you need to certify in good faith that:
- Current economic uncertainty makes the loan necessary to support your ongoing operations.
- The funds will be used to retain workers and maintain payroll or to make mortgage, lease and utility payments.
- You have not and will not receive another loan under PPP.
- Documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments and covered utilities for the eight weeks after receiving this loan.
- Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments and covered utilities. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
- All the information you provided in your application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program is punishable by law.
- You acknowledge that Simmons Bank will calculate the eligible loan amount using the tax documents you submitted. You affirm that the tax documents are identical to those you submitted to the IRS. You also understand, acknowledge and agree that Simmons Bank can share the tax information with the SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.