What is a PPP Loan : How to Apply for PPP Loan in Various Banks

The Paycheck Protection Program (PPP) is a $953-billion business loan program established by the United States federal government in 2020 through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help certain businesses, self-employed workers, sole proprietors, certain nonprofit organizations, and tribal businesses continue paying their workers.

The Paycheck Protection Program allows entities to apply for low-interest private loans to pay for their payroll and certain other costs. The amount of a PPP loan is approximately equal to 2.5 times the applicant’s average monthly payroll costs. In some cases, an applicant may receive a second draw typically equal to the first. The loan proceeds may be used to cover payroll costs, rent, interest, and utilities. The loan may be partially or fully forgiven if the business keeps its employee counts and employee wages stable.

The program is implemented by the U.S. Small Business Administration. The deadline to apply for a PPP loan was initially June 30, 2020, and was later extended to August 8. The Paycheck Protection Program was reopened on January 11, 2021.

Some economists have found that the PPP did not save as many jobs as purported and aided too many businesses that were not at risk of going under. They noted that other programs, such as unemployment insurance, food assistance, and aid to state and local governments, would have been more efficient at strengthening the economy. Opponents to this view note that the PPP functioned well to prevent business closures and cannot be measured on the number of jobs saved alone.

What is the Paycheck Protection Program (PPP)?

The Paycheck Protection Program (PPP) is a federal relief program established by Congress and implemented by the U.S. Treasury Department and the Small Business Administration (SBA) with rules, requirements, protocols and processes that all participating lenders, including Bank of America, must follow.

The eligibility requirements are outlined for applicants on the U.S. Treasury and SBA websites.

What counts as payroll costs?

Employee payroll costs consists of the following:

• Compensation to employees (excluding compensation to employees whose principal place of residence is outside the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); excluding costs over $100,000 on an annualized basis, as prorated for the period during which payments are made or the obligation to make the payments is incurred, for each employee
• Payment for vacation, parental, family, medical, or sick leave (except those paid leave amounts for which a credit is allowed under FFCRA Sections 7001 and 7003)
• Allowance for separation or dismissal
• Payment for the provision of employee benefits (including insurance premiums) consisting of group health care coverage, group life, disability, vision, or dental insurance, and retirement benefits
• Payment of state and local taxes assessed on employee compensation

Owner Compensation for independent contractor or sole proprietor consists of wage, commissions, income or net earnings from self-employment or similar compensation, not to exceed a total of $100,000 in annual compensation, on an annualized basis.

How can I make a payment to my PPP loan through Business Advantage 360, Bank of America’s small business online banking?

You can make a principal-only payment or full payoff to your PPP loan through Business Advantage 360 by following these steps:

1. Sign in with your Business Advantage 360 username and password, select your CARES Act Paycheck Protection Program loan
2. From the account details screen, click Make a Payment

3. On the payments screen, select the [Pay] From account and confirm the PPP loan is displayed in the [Pay] To field
4. Make the appropriate selection for Payment Type:
   −To pay down the loan balance, select Principal Only and enter the amount of the payment
   −To pay off the loan in full, select Pay off this loan

5. Make the appropriate selection for Frequency

6. Click Continue Transfer.

When can I apply for PPP loan forgiveness?

The simplified SBA Form 3508S is now available, in addition to the revised SBA Form 3508EZ and SBA Form 3508 applications. Eligible clients will receive an email with a link to access our loan forgiveness application when it becomes available to them.

As a reminder, based on the latest updates from the SBA, you now have more time to gather your documents and prepare your application. The timeframe for applying for loan forgiveness in the promissory note no longer applies.

How do I determine which application form I should use?

If your PPP loan is $150,000 or less, you will apply for loan forgiveness online through Bank of America using the simplified SBA Form 3508S.

If your PPP is more than $150,000, you will apply for loan forgiveness online through Bank of America using one of the following forms:

• PPP EZ Loan Forgiveness Application (SBA Form 3508EZ) — for borrowers who can check at least one of the two boxes set forth in the application instructions
• PPP Loan Forgiveness Application (SBA Form 3508) — for borrowers who do not meet the requirements for using Form 3508S or Form 3508EZ