Paycheck Protection Program
UPDATE – January 19, 2021 – We are now accepting new Paycheck Protection Program (PPP) applications. Please use this link to access our loan portal. https://cambridgesavings.lenderscooperative.com.
We will update this page regularly with helpful information to guide you through the loan application process. Thank you for your trust in Cambridge Savings Bank.
Please note Cambridge Savings Bank is only accepting new PPP loan applications through our Application Portal. Paper application packages will not be accepted.
CHECKLIST OF ITEMS YOU WILL NEED TO APPLY
- Cambridge Savings Bank Business Checking Account number (or checking account in your name for sole proprietors). All applicants must have a Cambridge Savings Bank Checking account with the same legal name as your PPP Loan Application. This is where we will deposit your PPP funds. Please contact your relationship manager if you intend to apply for a PPP loan in this round and do not have an existing checking account with Cambridge Savings Bank that meets this criteria.
- Know who the authorized signers are for your business and ensure all of them are able to provide their Social Security Number, mailing address, preferred email, and text-capable phone number for the DocuSign process of the PPP application (this is especially important for charities).
- A documented Borrower Resolution. Evidence of this information will likely be required as part of the application.
- The EIN or TIN number that’s associated with the business applying for the PPP loan
- Proof of entity type (LLC, S-corp, sole proprietor, etc.)
- Schedule of Ownership (names and percentages) for the business - the ownership percentage must add up to 100%
- Your 2020 & 2019 payroll tax reports (941, 940, or 944)
- You cannot account for gross pay that is over $100,000
- Payroll reports (many payroll providers will calculate reports for this program)
- Documentation showing the health insurance premiums paid by the business
- Documentation of the sum of all retirement plan funding that was paid by the business
- Do not include funding that came out of employee paychecks
For Sole Proprietors
- 2019 or 2020 Form 1040 Schedule C – whichever you used to calculate your loan
- 2019 or 2020 IRS Form 1099-MISC detailing nonemployee compensation received (box 7) – whichever year you used to calculate your loan
- Invoice, bank statement, or book of record that establishes you are self-employed. If using 2020 to calculate loan amount, this is required regardless of whether you have filed a 2020 tax return with the IRS. You must provide a 2020 invoice, bank statement, or book of record to establish you were in operation on or before February 15, 2020
Below are the key PPP updates recently provided by the SBA
- PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs
- PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures
- The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations
- The PPP provides 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. A borrower is generally eligible for a Second Draw PPP Loan if the borrower:
- Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses
- Has no more than 300 employees
- Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
Wave 3 Paycheck Protection Program (PPP) Questions & Answers
The Paycheck Protection Program provides loans to encourage certain qualified small businesses to retain employees through the COVID-19 pandemic and includes loan forgiveness subject to certain conditions.
In reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations. As a borrower, you must certify in good faith that your PPP loan request is necessary. To further ensure PPP loans are limited to eligible borrowers in need, the SBA has decided, in consultation with the Department of the Treasury, that it will review all loans in excess of $2 million, in addition to other loans as appropriate.
Borrower will need to apply to have the loan forgiven. In order for the loan to be forgiven, all employees must be kept on the payroll for 24-weeks and at least 60% of the loan funds must have been used to cover payroll costs. Any amount that is not forgiven will convert to a loan that must be repaid by the borrower.
Paycheck Protection Program (PPP) Loan Forgiveness Questions and Answers
What Can Funds be Used For?
- The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (at least 60% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
- Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
- Loans issued prior to June 5, 2020 have a maturity of 2 years. Loans issued after June 5, 2020 have a maturity of 5 years. All loans have an interest rate of 1%.
- Payroll costs are capped at $100,000 on an annualized basis for each employee.
- 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 over the 24 weeks after getting the loan. You will also owe money if you do not maintain your staff and payroll.
Loan Details and Forgiveness
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
The PPP Flexibility Act was signed into law on June 5th, providing more time to qualify for forgiveness and greater flexibility for Paycheck Protection Program borrowers. The Small Business Administration and US Treasury will issue guidance and rules, along with a modified loan forgiveness application. The forgiveness application isn’t due until 24 weeks from when your PPP loan was credited to your CSB deposit account.
We are working on implementing a digital solution to assist with your forgiveness application process; we suggest that you hold off on taking any action; and we will be in contact and will share more when we have further details and guidance from the Small Business Administration (SBA).
Please simply reference the PPP Forgiveness Application (Form 3508) as a resource to familiarize yourself with the application.
June 18, 2020, the Small Business Administration released a three-page “EZ” Paycheck Protection Program loan forgiveness application requiring less documentation and fewer calculations than previously required. Form 3508EZ applies to borrowers who meet any one of these three criteria:
- Applied for the PPP loan as self-employed, an independent contractor or a sole proprietor with no employees.
- Did not reduce salary or wages for any employee by more than 25%, and did not reduce the number or hours of their employees (excepting laid-off employees who refused an offer to return).
- Did not reduce salary or wages for any employee by more than 25% during the covered period and experienced reductions in business activity as a result of health directives related to COVID-19.
The streamlined forgiveness form is expected to smooth the forgiveness application process for a substantial portion of PPP borrowers. SBA also updated the regular Form 3508 to reflect recent changes made by Congress in the PPP Flexibility Act and issued a new interim final rule that implements changes made by the PPPFA.