Small Business owners are no strangers to being busy. Between serving customers, managing your employees, marketing your business, financials, payroll, scheduling, and paperwork –there’s little time for much else. Then you add a global pandemic to the mix and while in many ways the world seemed to slow down, small business owners everywhere had to work that much harder to try to find ways to survive. Now you’re hearing about the second wave of a coronavirus relief program for small businesses offered through the SBA and participating lenders called the Second Draw Paycheck Protection Program.
If you have more questions than answers or feel like there’s no time to begin to understand the program and eligibility, you’re not alone. At Commerce Bank of Wyoming, we are committed to being a resource and support to your Business and that’s why we’ve compiled a list of your most commonly asked questions.
Q: What documentation is necessary to substantiate payroll?
A: The Borrower must substantiate payroll costs using payroll reports or payroll provider reports, 940/941 tax filings, proof of employee benefit expenses, and bank statements as applicable.
Q: Is my business still eligible if I received a First Draw PPP Loan?
A: Small Businesses and non-profits that were eligible for the First Draw PPP Loan and complied with the program are eligible for a Second Draw PPP Loan if you meet the eligibility requirements for Gross Receipts comparison decline. Forgiveness of First Draw PPP does not need to be completed for eligibility, but funds have to be spent or will be spend per program rules.
Q: How much can I borrow through Second Draw PPP?
A: The Second Draw PPP amount is up to 2.5 months of Borrower’s Average Monthly Payroll costs (capped at $2,000,000). This calculation can be based on 2019 (same calculation as First Draw), or the Borrower may use the 12-month period prior to loan disbursement, or the Borrower may use the calendar year 2020. Self-employed Borrowers may use 2019 or 2020 Tax Return Schedule C or F (same calculation as First Draw). The prorated $100,000 cap per employee remains the same as the First Draw. For Hospitality and Food Service businesses, the calculation is up to 3.5 months.
We invite you to contact the experienced Lending Team at Commerce Bank of Wyoming with any additional questions you have about this program or if you would like further information. You can also visit us online to learn more at CommerceBankWyoming.com/PPP.
We are Member FDIC and Equal Housing Lender.