Paycheck Protection Program Loans

Update: 6/24/2020: PPP Loans

UPDATE: 1/11/2021 PPP LOANS

With the signing of the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act (Economic Aid Act) December 27, 2020, the Paycheck Protection Program (PPP) has been re-opened to businesses that have already received a loan and to businesses that would like to borrow for the first time. At this time the Olean Area Federal Credit Union has begun accepting new PPP loan applications from current business members only.

In order to simplify the process for you and to answer commonly asked questions, please take a moment to read the information below if you are interested and/or eligible for a Second (Second Draw) PPP LoanOR an Initial (First Draw) PPP Loan (i.e., you haven’t already received funding from us, or another financial institution, through this program).

A key update with the new Economic Aid Act allows borrowers to set their PPP loan covered period to be ANY length of time between 8 and 24 weeks to best meet their business needs.

For your reference we have included an FAQ section below to help as a resource should any additional questions arise as you move through each step. If you need further clarification, please submit your question to ppploanapplications@oleanfcu.com and someone will respond in a timely manner.

What You Need to Know for a Second Draw PPP Loan

When: Borrowers may start submitting applications on Wednesday, January 13, 2021. The PPP will remain open until March 31, 2021 (or until available funding is exhausted).

Who is Eligible: Any business that was in operation on February 15, 2020 and received a prior PPP loan either from the Credit Union or another financial institution and has used all of their first loan proceeds (or will have by the time of disbursement of the second loan), and has no more than 300 employees.

What you need in order to qualify:

a. Demonstrate that you experienced a year-over-year quarterly gross receipts reduction of at least 25% (i.e., compare your 2nd quarter total income from 2019 to the 2nd quarter total income from 2020).

  • If you request to borrow $150,000 or less, you do not need to provide documentation to prove the above is true, during the loan application process. It will be required, however, when requesting your loan to be forgiven.
  • If you request to borrow more than $150,000, you will need to provide documentation to prove the above is true, during the loan application process.
  • Acceptable documentation includes: quarterly financial statements or bank statements, or in the event that your total income is down more than 25% for the entire year, annual tax forms.

How do you apply:

a. Submit a new loan application for a Second Draw PPP loan, CLICK HERE to download. For your reference, this form is called SBA Form 2483-SD.

b. Provide supporting documentation for either 2019 or 2020 payroll expenses to verify your requested loan amount. You may choose either year to maximize your loan amount.

  • If you choose to use your 2019 payroll expenses and have received your first PPP loan through the Credit Union, WE DO NOT NEED that documentation, it is already on file.
  • If you did not receive your first PPP loan through the Credit Union, WE DO NEED your payroll expenses documentation for either year you choose.
  • If you choose to use your 2020 payroll expenses and have already received a loan from the Credit Union, WE DO NEED that documentation.

c. Supporting payroll documentation needed to verify your requested loan amount includes the following for the entire period of either January 1, 2019 through December 31, 2019 OR January 1, 2020 through December 31, 2020:

  • Quarterly payroll tax forms including: IRS Form 941 and state quarterly business and individual employee wage reports and unemployment insurance tax filing reports, to the relevant state (i.e., Form NYS-45) or equivalent third-party payroll service provider reports
  • Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans.

d. In most cases the loan amount will be calculated at 2.5 times the borrower’s average monthly payroll expenses.

  • For borrowers applying for a Second Draw PPP Loan, and using your 2019 payroll expenses to calculate your loan amount, your requested loan amount will likely equal the loan amount of your first PPP loan.
  • If your business is in the Accommodations and Food Service sector with a NAICS code that begins with a 72, your loan will be calculated at 3.5 times your average monthly payroll.
  • To learn how to calculate your maximum loan amount, click here.

Please use ppploanapplications@oleanfcu.com when sending us your application and required supporting documentation. We will only process applications and submit them to the SBA if ALL required documentation has been submitted.

What You Need to Know for a First Draw PPP Loan 

When: Borrowers may start submitting applications on Monday, January 11, 2021. The PPP will remain open until March 31, 2021 (or until available funding is exhausted).

Who is Eligible: Any business that was in operation on February 15, 2020 and has not received a prior PPP loan either from the Credit Union or another financial and has no more than 500 employees.

What you need in order to qualify: You need to be able to document that you have payroll expenses for the entire period of either January 1, 2019 through December 31, 2019 OR January 1, 2020 through December 31, 2020.

How do you apply:

a. Submit a new loan application for a First Draw PPP loan, CLICK HERE to download. For your reference, this form is called SBA Form 2483.

b. Provide supporting documentation for either 2019 or 2020 payroll expenses to verify your requested loan amount. You may choose either year to maximize your loan amount.

c. Supporting payroll documentation needed to verify your requested loan amount includes the following for the entire period of either January 1, 2019 through December 31, 2019 OR January 1, 2020 through December 31, 2020:

  • Quarterly payroll tax forms including: IRS Form 941 and state quarterly business and individual employee wage reports and unemployment insurance tax filing reports, to the relevant state (i.e., Form NYS-45) or equivalent third-party payroll service provider reports
  • Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans.

c. The loan amount will be calculated at 2.5 times the borrower’s average monthly payroll expenses.

  • To learn how to calculate your maximum loan amount, click here

Please use ppploanapplications@oleanfcu.com when sending us your application and required supporting documentation. We will only process applications and submit them to the SBA if ALL required documentation has been submitted.

PPP Loan Forgiveness for First and Second Draw PPP Loans

a. All First and Second Draw PPP loan borrowers may be eligible for full loan forgiveness if proceeds are used on payroll and other eligible business  expenses, employee and compensation levels are kept and there is a minimum of 60% of loan proceeds used on payroll costs.

 
Additional & Helpful Information:

  • For the latest and most up-to-date information regarding the PPP, please visit the SBA website.
  • For the specific details put forth by the SBA on PPP Second Draw Loans, click here to view the Interim Final Rule on Second Draw Loans.
  • For the specific details put forth by the SBA on the on PPP in general and PPP First Draw Loans, click here to view the Interim Final Rule on the PPP as Amended by Economic Aid Act.
  • Simplified PPP Loan Forgiveness: The Economic Aid Act includes new provisions to further simplify the PPP loan forgiveness application process for loans of $150,000 or less. This application has not been released from the SBA. We will send out further guidance once that application has been made available. More information on loan forgiveness is included in the FAQ section below.

FAQs

1. To view the SBA’s Information Sheet regarding Second Draw Loans, please click here
 
2. To view the SBA’s Information Sheet regarding First Draw Loans, please click here.
 
3. What are “Gross Receipts”? 
 Gross receipts include all revenue in whatever form received or accrued (in accordance with the borrower’s accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees or commissions, reduced by returns and allowances.
 
4. Why can you provide either your 2019 or 2020 Payroll Expenses as supporting documentation?
The SBA is allowing the borrower to make that determination in order to achieve their maximum loan amount.

5. What do “Payroll Expenses” include?
Payroll expenses include: gross wages, employer health benefit contributions, employer retirement contributions, and unemployment costs.
Compensation of an individual employee in excess of an annual salary of $100,000 must be excluded when calculating your PPP loan amount (note: employer contributions to healthcare and retirement benefits are not part of the amount deemed in excess of $100,000 annual salary).

6. How will PPP Loans be forgiven?
 Loans will continue to be forgiven as originally set forth in the CARES Act. However, the new Economic Aid Act includes provisions to further simplify the PPP loan forgiveness application process for loans of $150,000 or less. The legislation requires the SBA to produce a simplified forgiveness application not more than one page in length within 24 days from enactment into law. This application has not yet been released from the SBA. We will send out further guidance once that application has been made available.

UPDATE: 6/24/2020 PPP LOANS

On June 5, 2020 the “Paycheck Protection Program Flexibility Act of 2020” was signed into law modifying provisions related to forgiveness of loans made under the Paycheck Protection Program.

The following are some of the provisions in the Act that apply to PPP Loan Forgiveness:   

  • Now borrowers have a 24-week Covered Period (if you were funded prior to June 5, you can still use the 8-week period and Alternative Payroll Covered Period) to spend loan funds starting the date loan funds were deposited into your Olean Area Federal Credit Union Paycheck Protection Program savings account. 
  • Borrowers must use at least 60% of loan proceeds for eligible payroll costs to qualify for full Loan Forgiveness, down from 75%.
  • Borrowers can use up to 40% of funds for eligible non-payroll costs, up from 25%.
  • If a borrower requests Loan Forgiveness, they will not be required to start making loan payments until the SBA makes a final determination on the amount of their loan that will be forgiven.
  • Borrowers are required to submit a Loan Forgiveness Application within 10 months after their Covered Period ends.
  • If the borrower does not request Loan Forgiveness, they will be required to start making payments 10 months after their Covered Period ends.

The Small Business Administration (SBA) has also made it easier for borrowers to request Paycheck Protection Program (PPP) Loan Forgiveness with a new SBA Form 3508EZ and a revised SBA Form 3508.

The SBA has published the new PPP Loan Forgiveness Application – SBA Form 3508EZ for borrowers that:

  • Are self-employed and have no employees; OR
  • Did not reduce the annual salary or hourly wages of any employee by more than 25% during their covered period compared to the period between January 1, 2020 and March 31, 2020 and did not reduce the number of their employees or the average paid hours of employees between January 1, 2020 and the end of their covered period; OR
  • Experienced reductions in business activity due to compliance with requirements as a result of health directives related to COVID-19 and did not reduce the salaries or wages of any employee by more than 25%.
  • For instructions on how to complete the SBA Form 3508EZ and see a list of the documents that each borrower is required to maintain and submit with it’s PPP Loan Forgiveness Application click here

Borrowers that do not meet the SBA Form 3508EZ criteria can use the updated PPP Loan Forgiveness Application – SBA Form 3508.  

  • For instructions on how to complete the SBA Form 3508 and see a list of the documents that each borrower is required to maintain and submit with its PPP Loan Forgiveness Application click here

Your SBA PPP Loan Number, Lender PPP Loan Number, PPP Loan Amount and PPP Loan Disbursement Date can be found on the first page of your “U.S. Small Business Administration Note” that you signed at the time of your PPP loan closing.

Before requesting Loan Forgiveness, please review the PPP Loan Forgiveness Application and Instructions in their entirety.

  • In order for your application to be processed all required documentation must be submitted with your application.
  • It could take up to five months for the SBA to review and make a final determination on your application.
  • Once the SBA has made its final decision, we will notify you.

Please email a completed application and all “required” supporting documentation to ppploanapplications@oleanfcu.com.

Please contact us if you have any questions.

UPDATE: 4/27/2020 PPP LOANS

The Small Business Administration (“SBA”) will resume accepting Paycheck Protection Program (“PPP) applications on Monday, April 27, 2020 at 10:30am EDT.

As a current SBA Lender, we will continue to offer PPP Loans. If you are interested in applying, we are accepting applications from our current members that have an active personal or business account with the Olean Area Federal Credit Union.

Please reference this guide/checklist from the US Chamber of Commerce that summarizes the PPP.

Here is the application that you may use to apply and a borrowers information sheet, that provides more detail about the PPP. To learn more and get up-to-date guidance that has been released from the U.S. Department of Treasury please click here.

In order to prepare your application, we suggest that you review the application above and start gathering the following “required” information. Not all of this information will be applicable to you, however you are required to include supporting documentation with your application. If you do not include this documentation your loan application will not be processed. Final borrowing amount will be determined based on your “payroll costs” for the calendar year 2019. If you were not in business for the full calendar year your borrowing amount will be determined based on your payroll costs for January and February of 2020. If you are a seasonal business you may use the time period April 1, 2019 to June 30, 2019 to determine your payroll costs.

  • Payroll reports/payroll journals for the period from January 1, 2019 through December 31, 2019.
  • Quarterly payroll filings reported to the IRS (Form 941) and State (NYS 45 and ATT/PA-UC-2 and UC-2A) for the period January 1, 2019 through March 31, 2020 (5 quarters of reports).
  • Health and dental insurance costs (employer portion) for the period from January 1, 2019 through December 1, 2019, general ledger activity and monthly bills.
  • Employer contributions to Health Savings Account (HSA) or Health Reimbursement Accounts (HRA) for the period from January 1, 2019 through December 31, 2019, general ledger activity and monthly bills.

For sole proprietors and independent contractors:

  • A copy of your 2019 Form 1040 Schedule C, and IRS Form 1099-MISC (if applicable) is required for your application to be considered. If you have not yet filed your taxes for 2019, at a minimum you are required to fill out your Schedule C for 2019 and compute your net income (line 31). If you have employees, additional payroll costs may be included when calculating your loan amount. These costs include wages, employer contributions to healthcare and retirement benefits, and state and local taxes assessed on employee compensation.

For partnerships:

  • A copy of your 2019 Form 1065 Schedule K-1 is required for your application to be considered. If you have not yet filed your taxes for 2019, at a minimum you are required to fill out your Form 1065 and Schedule K-1 to compute your net earnings from self-employment (line 14a). If you have employees, additional payroll costs may be included when calculating your loan amount. These costs include wages, employer contributions to healthcare and retirement benefits, and state and local taxes assessed on employee compensation.

To learn how to calculate your maximum loan amount click here.

Loan Forgiveness:

All PPP loans are eligible for up to 100% forgiveness of the loan amount by the SBA.

A borrower is eligible for loan forgiveness for expenses incurred during the immediate 8-week period beginning on the date of the origination of the loan for the following items:

  • Payroll Costs
  • Utilities Payments
  • Rent/Lease Payments
  • Interest Payments on debt service obligations of the borrower

Please refer to the following documents for further detail regarding loan forgiveness:

Because times are uncertain, we know that many of you are anxious to get your applications for this program into us as soon as possible, as well as funded once they are approved. We will work expediently on your request to get it processed as soon as possible. Due to the limited amount of funds that have been approved for the PPP, we cannot guarantee that all applicants will receive funding under this program. However, we are striving to get approval for all of our members.   

Please email a completed application and all “required” supporting documentation to ppploanapplications@oleanfcu.com.

We would like to thank all our members that have applied for a Paycheck Protection Program loan with the Olean Area Federal Credit Union. We appreciate your financial partnership and are happy that we can assist you in these unprecedented times.

UPDATE 4/20/2020: PPP Loans

First and foremost, we would like to thank all of our members that have applied for a Paycheck Protection Program (“PPP”) loan with the Olean Area Federal Credit Union. We appreciate your financial partnership and are happy that we were able to assist you in these unprecedented times.

We have begun and are diligently working to close and disburse funds for every one of your loan requests. If we have not yet closed on your loan, you will hear from us soon to schedule your closing. We understand how important it is to get these funds to you as quickly as possible so you can continue to pay your employees.

As a current SBA Lender, we will continue to offer PPP Loans if more funds become available. For those of you that are still interested in applying, we are accepting applications from our current members that have an active account with us.

With that said, as of April 16th the original $349 billion that was appropriated for the PPP has been depleted. Currently the Small Business Administration (“SBA”) is not accepting new applications. Our government is currently in negotiations to approve additional funds to the PPP and we are hopeful that this will happen soon.

As we continue to navigate through these challenging times, we want to assure you that the Olean Area Federal Credit Union is here to help you.

Secondly, as mentioned above, we greatly appreciate your financial partnership with us and we will do our part to see that your businesses survive and succeed. As a community, we will get through this together.

Please reference this guide/checklist from the US Chamber of Commerce that summarizes the PPP. Also, here is the application that you may use to apply and a borrower’s information sheet, that provides more detail about the PPP. To learn more and get up-to-date guidance that has been released from the U.S. Department of Treasury please click here.

In order to prepare your application, we suggest that you review the application above and start gathering the following “required” information. Not all of this information will be applicable to you, however you are required to include supporting documentation with your application. If you do not include this documentation your loan application will not be processed. Final borrowing amount will be determined based on your “payroll costs” for the calendar year 2019. If you were not in business for the full calendar year your borrowing amount will be determined based on your payroll costs for January and February of 2020. If you are a seasonal business you may use the time period April 1, 2019 to June 30, 2019 to determine your payroll costs.

  • Payroll reports/payroll journals for the period from January 1, 2019 through December 31, 2019.
  • Quarterly payroll filings reported to the IRS (Form 941) and State (NYS 45 and ATT/PA-UC-2 and UC-2A) for the period January 1, 2019 through March 31, 2020 (5 quarters of reports).
  • Health and dental insurance costs (employer portion) for the period from January 1, 2019 through December 1, 2019, general ledger activity and monthly bills.
  • Employer contributions to Health Savings Account (HSA) or Health Reimbursement Accounts (HRA) for the period from January 1, 2019 through December 31, 2019, general ledger activity and monthly bills.

For sole proprietors and independent contractors:

  • A copy of your 2019 Form 1040 Schedule C, and IRS Form 1099-MISC (if applicable) is required for your application to be considered. If you have not yet filed your taxes for 2019, at a minimum you are required to fill out your Schedule C for 2019 and compute your net income (line 31). In order to calculate your loan amount, you must take line 31 from your Schedule C, divide by 12, and then multiple by 2.5. If you have employees, additional payroll costs may be included when calculating your loan amount. These costs include wages, employer contributions to healthcare and retirement benefits, and state and local taxes assessed on employee compensation.

Loan Forgiveness:

  • All PPP loans are eligible for up to 100% forgiveness of the loan amount by the SBA.
  • A borrower is eligible for loan forgiveness for expenses incurred during the immediate 8-week period beginning on the date of the origination of the loan for the following items:
  • Payroll Costs
  • Utilities Payments
  • Rent/Lease Payments
  • Interest payments on debt service obligations of the borrower
  • Please refer to the following documents for further detail regarding loan forgiveness:

Because times are uncertain, we know that many of you are anxious to get your applications for this program into us as soon as possible, as well as funded once they are approved. We will work expediently on your request to get it processed as soon as possible. Due to the limited amount of funds that have been approved for the PPP, we cannot guarantee that all applicants will receive funding under this program. However, we are striving to get approval for all of our members.   

Please email a completed application and all “required” supporting documentation to ppploanapplications@oleanfcu.com.

Thank you again for your business and your patience.

Paycheck Protection Program Loans Information

Paycheck Protection Program Loans Information

As we continue to navigate through these challenging times, we want to assure you that Olean Area Federal Credit Union is here to help you.

Secondly, we greatly appreciate your financial partnership with us and we will do our part to see that your businesses survive and succeed. As a community, we will get through this together.

As a current Small Business Administration (“SBA”) Lender we will be offering Paycheck Protection Program Loans.

Please reference this guide/checklist from the US Chamber of Commerce that summarizes the program, application and information sheet, specifically for borrowers, that the Department of Treasury has released.

At the time of this communication we are still awaiting further guidance from the SBA as they finalize the rules to this program, however we have started accepting applications, effective April 3, 2020.

An approval decision on your application and funding of your loan request will occur at a date to be determined upon receiving further guidance from the SBA.

In order to prepare your application, we suggest that you review the application above and start gathering the following “required” information. Not all of this information will be applicable to you, however you are required to include supporting documentation with your application. If you do not include this documentation your loan application will not be processed. Final borrowing amount will be determined based on your “payroll” costs for the calendar year 2019. If you were not in business for the full calendar year your borrowing amount will be determined based on your payroll costs for January and February of 2020. If you are a seasonal business you may use the time period April 1, 2019 to June 30 2019 to determine your payroll costs.

  • Payroll reports/payroll journals for the period from January 1, 2019 through December 31, 2019.
  • Quarterly payroll filings reported to the IRS (Form 941) and State (NYS 45 and ATT/PA-UC-2 and UC-2A) for the period January 1, 2019 through March 31, 2020 (5 quarters of reports).
  • Health and dental insurance costs (employer portion) for the period from January 1, 2019 through December 1, 2019, general ledger activity and monthly bills.
  • Employer contributions to Health Savings Account (HSA) or Health Reimbursement
  • Accounts (HRA) for the period from January 1, 2019 through December 31, 2019, general ledger activity and monthly bills.
  • Retirement costs (employer contributions) for the period from January 1, 2019 through December 31, 2019, general ledger activity and monthly bills.

Additional information may be needed as we receive more guidance from the SBA.

At this time we are “only” accepting applications from current members of the Credit Union. You must have an active business account with us in order to apply.

Because times are uncertain, we know that many of you are anxious to get your applications for this program into us as soon as possible. Thus, we are diligently working to put a process in place to be able to fund your loan requests expediently when we receive final guidance from the SBA.

Please email a completed application and all “required” supporting documentation to ppploanapplications@oleanfcu.com.

Thank you again for your business and your patience.