Updated 4/11: Latest on SBA PPP loans for SAFE Business Banking members

As businesses across the United States struggle amid the sudden challenges posed by the COVID-19 pandemic, the U.S. Small Business Administration (SBA) is providing help with economic injury loans as well as new programs created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted in late March.

SPECIAL NOTICE:

SAFE Credit Union has made the difficult business decision to stop accepting Paycheck Protection Program (PPP) loan applications after 2 p.m., Saturday, April 11, 2020, due to a high volume of applications. If you submitted an application before that time, SAFE will be in contact with you in the near future to confirm your submission. You can learn about next steps at www.safecu.org/pppfaq.

We sincerely apologize for any inconvenience this may cause you. Please find the latest updates from SAFE at www.safecu.org/coronavirus.

SBA Paycheck Protection Program

Congress allocated $349 billion in forgivable loans through the Paycheck Protection Program, or PPP. The loan provides support for business expenses, including mortgage, rent, payroll, and utilities. The amount is based in part on 2.5 months’ payroll costs.

How can SAFE help?

Step 1. Determine whether you are a current Business Banking member.

• Do you have a commercial loan and/or SBA loan with SAFE? These are loans used to purchase property and equipment used by businesses that have gone through a vetted process that includes documentation about your business.
• Do you have a Business Banking account with us? Includes Business savings accounts, Business Money Market accounts, etc. Business Banking members have also provided SAFE with documentation about their business and confirmed ownership information.
• If you answered yes to either of the above questions, you are a Business Banking member with SAFE. Go to Step. 2. If you answered no to both questions, please contact your current primary business banking financial institution for assistance with the PPP loan. They will have the necessary documentation to provide you the most efficient assistance. Learn more in our special message to non-SAFE business members.

Step 2. How current Business Banking members may start the application process.

• Go to safecu.org and log in to your Business Banking account. The log-in information is different than your consumer SAFE account, if you have both.
• Go to the menu bar and click on "Additional Services"
• Under the Business Member Services menu, choose "Paycheck Protection Program (PPP)"
• Start the application process.

The most efficient way to apply for a PPP loan is through the online application process. We are not accepting PPP loan applications at our branches or in person at this time.

Please note: All loans are subject to approval. Submitting an application is not a guarantee of receiving a PPP loan.

Advisory as if April 6: The application portal is experiencing heavy traffic today but it is accepting submissions. We apologize for any inconvenience.

When can I apply?

Starting April 3: Applications for small businesses with fewer than 500 employees will be accepted

Starting April 10: Applications for independent contractors and the self employed will be accepted.

Deadline to apply is June 30, 2020.

Where can I apply?

It’s best to apply through your current primary business banking financial institution. All federally insured credit unions, banks, and Farm Credit Systems are eligible to assist their members and customers with the applications. But you’re encouraged to go to your primary financial institution first. They should already have all of your business entity information on file and will be able to more quickly assist you than starting fresh with a new financial institution.

Who can apply?

The CARES Act expands who is eligible to apply for the PPP. All businesses, nonprofits, veterans’ organizations, tribal businesses with fewer than 500 employees, as well as sole proprietorships, self-employed individuals, and independent contractors can apply.

What paperwork do I need to apply?

You’ll need to fill out an application at the location inside online banking (provided above) and have the following documentation:

• Copies of payroll tax reports filed with the IRS (including Forms 941, 940, state income, and unemployment tax filing reports) for the entire year of 2019 and the first quarter of 2020 (if available).
• Copies of payroll reports for each pay period for the preceding 12 months. Such reports should include gross wages including PTO (vacation, sick, or other PTO). This includes payroll reports through the pay period preceding the origination of the SBA loan.
• Documentation reflecting the health insurance premiums paid by the company under a group health plan, including owners of the company, for the immediately preceding 12 months prior to the date of the SBA loan origination. Copies of the monthly invoices should suffice.
• Documentation of all retirement plan funding by the employer for the immediately preceding 12 months. Copies of workpapers, schedules, and remittances to the retirement plan administrator will suffice.

How much of the loan will be forgiven?

One of the primary purposes of the PPP is to keep people employed. Therefore, you will need to keep your employees on your payroll to qualify for loan forgiveness.

Why would I need to repay the loan?

• If you use the money for purposes beyond payroll, rent/mortgage, and utilities
• You reduce your full-time head count
• If you decrease employee compensation by more than 25% for employees who made less than $100,000 in 2019
• You don’t rehire employees you let go between Feb. 15, 2020, and April 26, 2020, by June 30, 2020.

How do I get loan forgiveness

You’ll need to submit a request for loan forgiveness with the lender who assisted you with the loan. You’ll need to provide the following items:

• Copies of payroll tax reports filed with the IRS (including Forms 941, 940, state income, and unemployment tax filing reports for the eight-week period following the origination of the loan
• Copies of payroll reports for each pay period for the eight-week period following the origination of the loan. Gross wages including PTO (including vacation, sick and other PTO) should be reflected.
• Documentation reflecting the health insurance premiums paid by the company under a group health plan, including owners of the company, for the eight-week period following the origination of the loan. Copies of monthly invoices will suffice.
• Copies of all lease agreements for real estate and tangible personal property should be presented along with proof of payment during the eight-week period following the loan origination date.
• Copies of canceled checks, statements or other evidence of utilities paid during the eight-week period following the origination date.

The lender will make the decision on forgiveness within 60 days of the request.

Important note: The SBA advises that due to the high number of PPP loans, no more than 25% of the forgiven amount may be for non-payroll costs. That means to get full forgiveness, 75% of the loan must go to payroll expenses.

If you have to pay

Interest on PPP is a 1.00% fixed rate. The loan is due in two years.

How SAFE can help

SAFE is here to help our current Business Banking members apply for PPP loans. If your primary business banking relationship is with another financial institution, we encourage you to go to them first to apply, as they will already have your business documentation available to facilitate the application process. When contacting SAFE, please be aware that we are experiencing higher than normal call volumes that are resulting in long wait times. We thank you for your patience and will be sure to provide you with the care and attention we're providing to all members.

Ken Getz

Ken is the senior vice president of business development at SAFE and oversees the origination teams for Commercial Lending and Business Services.