CARES Act Programs for Businesses and Non-Profits

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed to help businesses through these times of uncertainty.

Arizona Bank & Trust customers can now register and apply for PPP Loan Forgiveness

 

Click for our PPP Forgiveness Resource Center


Latest Updates on the Paycheck Protection Program

 

SBA and Treasury Announce Simpler PPP Forgiveness for Loans of $50,000 or Less - October 8, 2020

The U.S. Small Business Administration, in consultation with the Treasury Department, recently released a simpler loan forgiveness application for Paycheck Protection Program (PPP) loans of $50,000 or less. This action streamlines the PPP forgiveness process to provide financial and administrative relief to America’s smallest businesses while also ensuring sound stewardship of taxpayer dollars.

  • Click here for the SBA Press Release.
  • Click here to view the SBA simpler loan forgiveness application.
  • Click here to view the SBA Interim Final Rule on the simpler forgiveness process for loans of $50,000 or less.
  • The complete SBA FAQ document can be found here.

We are working to quickly understand how this affects our client borrowers. We will be communicating with our clients with PPP Loans of $50,000 or less to provide additional information soon. Please continue to visit our PPP Forgiveness Resource Center for updates on PPP Forgiveness.

 

Additional SBA Guidance Released - August 24, 2020

On August 24, the Small Business Administration (SBA), in consultation with the Department of the Treasury, provided guidance on the Treatment of Owners and Forgiveness of Certain Nonpayroll Costs. The complete SBA FAQ document can be found here.

 

IMPORTANT NOTICE: These FAQs are based on the provisions of the CARES Act as implemented and interpreted by the U.S. Small Business Administration (“SBA”) and the U.S. Treasury Department (“U.S. Treasury”) through interim and final regulations, FAQs, and regulatory guidance and interpretations. The SBA and U.S. Treasury continue to issue new regulations, FAQs and guidance that in some cases changes or conflicts with prior guidance. The eligibility of a PPP loan for forgiveness and the amount and timing of any forgiveness will be subject to and dependent on approval pursuant to the regulations, FAQs and guidance in effect at the time a request for forgiveness is processed and as a result, we cannot provide you any assurances regarding forgiveness of your loan until such approval is received and any review or audit by the SBA completed. The information provided herein is not intended to constitute legal advice. 

AGENT FEE ACKNOWLEDGEMENT:  At the time you submitted your PPP loan application with us, each borrower certified as follows:

You acknowledge that the bank provided the forms and necessary information to complete your Paycheck Protection Program Application. By filing an application with us, you further certify that no agent (attorney, accountant, consultant, etc.) was utilized in the completion of your application. You further acknowledge and agree that we will not process any application or close any loans if an agent seeking payment for services has been utilized and that you will inform any persons you have consulted with regarding your application of this requirement.


Previous Updates on the Paycheck Protection Program. Click a Headline Below.

  • SBA Guidance on PPP Loan Forgiveness - August 13, 2020

    SBA Guidance on PPP Loan Forgiveness - August 13, 2020

    On August 11, the Small Business Administration (SBA), in consultation with the Department of the Treasury, provided guidance to address borrower and lender questions concerning forgiveness of Paycheck Protection Program (PPP) loans. The complete SBA FAQ document can be found here.

  • CISA Tracking Fraudulent Emails Posing as SBA - August 12, 2020

    CISA Tracking Fraudulent Emails Posing as SBA - August 12, 2020

    The Cybersecurity and Infrastructure Security Agency (CISA) is currently tracking an unknown malicious cyber actor who is spoofing the Small Business Administration (SBA) COVID-19 loan relief webpage via phishing emails. These emails include a malicious link to the spoofed SBA website that the cyber actor is using for malicious re-directs and credential stealing.

    For more details please see the full alert here.

    The Alert includes a screenshot of the malicious webpage and the Indicators of Compromise as well as mitigation steps.

     

  • SBA Guidance on PPP Loan Forgiveness - August 5, 2020

    SBA Guidance on PPP Loan Forgiveness - August 5, 2020

    On August 4, the Small Business Administration (SBA), in consultation with the Department of the Treasury, provided guidance to address borrower and lender questions concerning forgiveness of Paycheck Protection Program (PPP) loans. The complete SBA FAQ document can be found here.

  • PPP Forgiveness Resource Center Created to Provide Access to Important Information on the Loan Forgiveness - July 27, 2020

    Arizona Bank & Trust Has Created the PPP Forgiveness Resource Center to Provide Our Customers Access to Important Information on the PPP Loan Forgiveness Process - July 27, 2020 

    On the PPP Forgiveness Resource Center you will find:

    • Arizona Bank & Trust's PPP Forgiveness Training Video
    • Arizona Bank & Trust Link to PPP Forgiveness Online calculator and Application
    • Updates from the SBA on PPP
    • Forgiveness Frequently Asked Questions

    Click Here for the PPP Forgiveness Resource Center

  • Small Business Administration (SBA) Releases PPP Loan Information - July 7, 2020

    Small Business Administration (SBA) Releases PPP Loan Information - July 7, 2020 

    On July 6, the SBA chose to release PPP loan information at the request of Congress, the media and others given the significant taxpayer commitment to the program. This was not a decision made by Arizona Bank & Trust or any other bank that participated in the government program.

    Not all details about individual PPP loans are being released by the SBA.

    • Names of borrowers with a PPP loan under $150,000 will not be identified at this time. For loans under $150,000, only the city, state, zip code, the number of employees benefited, and the congressional district will be identified, along with the name of the lender that made the loan.
    • For PPP loans over $150,000, the SBA released the name of the business along with the information above. The SBA released a dollar range for these loans, not the exact amounts.

    PPP Loan Forgiveness
    As of July 6, the SBA has not begun to accept applications for forgiveness. Arizona Bank & Trust has not received any information from the SBA on when they will begin to accept applications for forgiveness. We will closely monitor SBA announcements and communicate updates in a timely fashion. Customers should not fill out or submit SBA PPP forgiveness applications to Arizona Bank & Trust. We will be providing customers an online tool and calculator to assist in completion of the PPP forgiveness application.

    Extension of the PPP Loan Program through August 8, 2020
    On July 4, President Trump signed the PPP Extension Bill to allow small businesses to apply for the loans through August 8. The program was expected to end on June 30; however, it is reported that approximately $130 billion of the $670 billion remained in the program.

    Arizona Bank & Trust will continue to support you and our other business customers as we do our part to help fuel the economic recovery in our community. We are here to help and answer any questions you may have about PPP or our other small business programs.

  • Paycheck Protection Program Flexibility Act Guidance Published - June 10, 2020

    Paycheck Protection Program Flexibility Act Guidance Published - June 10, 2020 

    On June 10, 2020, the SBA and US Treasury publish guidance for Paycheck Protection Program Flexibility Act. Read the Interim Final Rule.

  • Paycheck Protection Program Flexibility Act Becomes Law - June 5, 2020 

    Paycheck Protection Program Flexibility Act Becomes Law - June 5, 2020 

    On June 5, 2020, the Paycheck Protection Program Flexibility Act was signed by President Trump and became law. Here’s a link to the Paycheck Protection Program Flexibility Act.

  • Interim Final Rule on Loan Review Procedures and Related Borrower and Lender Responsibilities - May 22, 2020

  • Interim Final Rule on Loan Forgiveness - May 22, 2020

    On Friday, May 22, 2020, The U.S Treasury Department and the SBA issued the Interim Final Rule for PPP Loan Forgiveness.

  • Paycheck Protection Program Loan Forgiveness Application - May 15, 2020

    Paycheck Protection Program Loan Forgiveness Application - May 15, 2020 

    On May 15, 2020 the SBA published a PPP Loan Forgiveness Application and instructions.

    PLEASE DO NOT COMPLETE AND SUBMIT THIS APPLICATION AT THIS TIME.

    Arizona Bank & Trust is providing this as a further guide regarding forgiveness during the period between now and when you may apply for forgiveness

    Arizona Bank & Trust will provide an online application and calculator tool for submitting and processing forgiveness applications.

  • Employee Retention Credit Eligibility after return of PPP Loan by May 14, 2020 - May 6, 2020

    Employee Retention Credit Eligibility after return of PPP Loan by May 14, 2020 - May 6, 2020 

    Is an employer that repays its PPP loan by the safe harbor deadline (May 14, 2020) eligible for the Employee Retention Credit? Answer: Yes. An employer that applied for a PPP loan, received payment, and repays the loan by the safe harbor deadline (May 14, 2020) will be treated as though the employer had not received a covered loan under the PPP for purposes of the Employee Retention Credit. Therefore, the employer will be eligible for the credit if the employer is otherwise an eligible employer for purposes of the credit.

    US Treasury FAQ #45

  • How the SBA Will Review Borrowers’ Required Good-Faith Certification - May 13, 2020

    Today the U.S. Treasury released an additional FAQ (#46) regarding the Paycheck Protection Program.

    FAQ #46 - Question: How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?

    Answer: When submitting a PPP application, all borrowers must certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”

    SBA, in consultation with the Department of the Treasury, has determined that the following safe harbor will apply to SBA’s review of PPP loans with respect to this issue: Any borrower that, together with its affiliates,1 received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.

    SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans. This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees.

    In addition, given the large volume of PPP loans, this approach will enable SBA to conserve its finite audit resources and focus its reviews on larger loans, where the compliance effort may yield higher returns. Importantly, borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance. SBA has previously stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by SBA for compliance with program requirements set forth in the PPP Interim Final Rules and in the Borrower Application Form.

    If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request.

    SBA’s determination concerning the certification regarding the necessity of the loan request will not affect SBA’s loan guarantee.

    US Treasury FAQ #46

  • Extension to Return PPP Funds - May 5, 2020

    Extension to Return PPP Funds - May 5, 2020 

    The SBA is extending the safe harbor date for repayment of PPP funds from May 7, 2020 to May 14, 2020 by borrowers that have concerns about their prior certification that economic uncertainty made their loan request necessary to support ongoing operations. Borrowers do not need to apply for this extension. Borrowers who determine that they have other adequate sources of liquidity that are not detrimental to business operations may return the PPP funds by May 14, 2020 and will be deemed by the SBA to have made their prior certification in good faith. The SBA intends to provide additional guidance on how it will review the certification prior to May 14, 2020.

    US Treasury FAQ #42

  • Employee Refuses Rehire - May 5, 2020

    Employee Refuses Rehire - May 5, 2020

    If a borrower (employer) offers to rehire an employee at the same wages and number of hours and the employee declines the offer of employment, the borrower (employer) may exclude the laid-off employee from the forgiveness reduction calculation and that might otherwise reduce the borrower’s loan forgiveness amount if its full-time equivalent employees decrease from the level at February 15, 2020 and are not rehired by June 30, 2020. The borrower must have made a good faith written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower.

    US Treasury FAQ #40

  • Reduction in Forgiveness Due to Reduction in Employees or Wages - April 29, 2020

    Reduction in Forgiveness Due to Reduction in Employees or Wages - April 29, 2020 

    The total amount of your loan that may otherwise be forgiven may be reduced if you have a Reduction in Employees or Reduction in Salary or Wages, each as further described below, during the period beginning on February 15, 2020 and ending on April 26, 2020. This is in effect a penalty in that it may reduce your forgiveness amount beyond the reduction you might already incur if your monthly payroll costs for the 8 weeks after the date your loan is disbursed are less than the amount used to calculate your eligible loan amount.

    Click for more Information

    Note: The SBA has not yet issued complete rules and guidance on potential reductions in forgiveness and as a result, the specific requirements described below may change.

  • PPP Applications Update - April 29, 2020

    Paycheck Protection Program Update - April 29, 2020 

    We are not sending additional new applications for the SBA Paycheck Protection Program at this time.

  • PPP Applications Resume - April 27, 2020

    Paycheck Protection Program - April 27, 2020 

    The SBA will resume taking applications for the Paycheck Protection Program on Monday, April 27, 2020 at 10:30 am EDT. 

  • PPP New Funding - April 24, 2020

    Paycheck Protection Program New Funding - April 24, 2020 

    $310B of additional funding was appropriated to the SBA Paycheck Protection Program on April 24, 2020

  • Economic Uncertainty Certification – New Guidance Issued - April 23, 2020

    Paycheck Protection Program: Economic Uncertainty Certification – New Guidance Issued - April 23, 2020 

    On April 23, 2020, The U.S. Treasury Department issued an update to its PPP Frequently Asked Questions (FAQs), specifically addressing an applicant’s certification of necessity. Click here for additional details. 

    This guidance was issued under the FAQ: “Do businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?” However, the Treasury Department gave no guidance as to when a company might be considered “large” nor did it suggest that the criteria would only be applicable to large companies, however this may be defined in the future. 

    Although this occurred after the initial round of funding was depleted and $349 billion in loans already approved, it is apparent that the U.S. Treasury Department intends this guidance to apply to loans that have already been approved and funded. 

    If a PPP applicant, including one that already has an approved loan, did not specifically consider alternate sources of liquidity in connection with their initial application, they should do so. If other sources of liquidity are or were available to the applicant, then some assessment should be made as to whether these other sources are significantly detrimental to the applicant’s business. 

    This guidance does not require an applicant to demonstrate that they were unable to obtain credit elsewhere, but rather support their application certification that a PPP loan is necessary to support ongoing operations.

    Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith, even if they now conclude that there were other sources of liquidity available to it that were not significantly detrimental.

  • PPP Funds Depleted - April 16, 2020

    Paycheck Protection Program Funds Depleted - April 16, 2020

    The SBA announced that the $350B of funds allocated to the Paycheck Protection Program have been depleted.

    We are unable to accept requests to apply for the Paycheck Protection Program or submit any additional applications for the Paycheck Protection Program to the SBA at this time.  

    If you have previously submitted an electronic application to us, we will send you an email communication regarding the status of your application. 

    We will communicate via email and our website, if and when, we are able to accept additional applications, although this will require additional action by the government to enhance and expand the PPP loan program. 


On Friday, March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted, representing one of the largest emergency aid and economic assistance programs ever adopted. Although guidelines on the implementation of the CARES Act have not yet been shared with financial institutions, we recognize the importance of communicating information about the CARES Act, and how it could potentially assist you and your business.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act Programs

Paycheck Protection Loan Program

The following is a summary of certain provisions in the CARES Act. Before taking any action regarding the CARES Act, we recommend you consult with your financial, tax and legal advisors as appropriate. 

Information

  • New $349 billion US Small Business Administration (SBA) loan program for businesses with no more than 500 employees impacted negatively due to the COVID-19 outbreak
  • The SBA has stated that businesses with more than 500 employees will qualify if they otherwise meet size standards. The following page contains a link to the list of size standards and a size standards tool: sba.gov/size-standards.
  • Expanded SBA loan eligibility
  • Incentivizes businesses to retain employees and rehire any employees already laid off or furloughed due to the COVID-19 outbreak
  • Program period from February 15, 2020 through June 30, 2020

Benefits

  • Loans for qualified costs related to employee compensation and benefits, including (i) payroll costs, (ii) continuation of health care benefits, (iii) employee compensation (of those making less than $100K), (iv) mortgage interest and scheduled principal payment obligations, (v) rent, (vi) utilities and (vii) interest on debt incurred before the covered period
  • Maximum loan based on employee salary formula, but not more than $10 million
  • Interest rate is currently set at 1.00%.
  • Principal, interest and fees deferred for 6 to 12 months from origination date
  • No SBA Fee
  • 2-year term from date borrower applies for loan forgiveness
  • All or a portion of the loan may be forgivable in an amount equal to the amount spent during an 8-week period after the origination date on (i) rent, (ii) payroll costs for workers making less than $100K, (iii) interest on a mortgage, and (iv) utility payments
  • Incentivizes businesses to retain and rehire employees laid off or furloughed due to the COVID crisis by reducing the amount forgiven proportionally by any reduction in employees retained compared to the prior year
  • Loan forgiveness under this program will not be included in gross income for federal income tax purposes
  • Loans made by lenders locally using delegated authority

General Eligibility

  • Businesses that employ no more than 500 employees (or a greater number based on the size standard applicable to the industry)
  • Certain businesses in the Accommodation and Food Services Industry (NAICS Code 72) may be eligible if they have no more than 500 employees per physical location. In most cases, the number of employees is counted together with all affiliates.
  • Expands the type of eligible businesses and includes non-profits
  • Business was operational on February 15, 2020, and had employees for whom it paid salaries and payroll taxes, or paid independent contractors
  • Waives the credit available elsewhere, personal guaranty and collateral requirements
  • Borrower certification of satisfaction of program requirements and economic hardship

Next Steps

  • Federal regulations required to fully assess eligibility and complete applications
  • Development of specific loan terms and documents
  • Establishment of criteria for eligible lenders in addition to SBA approved lenders
  • Lender adoption of procedures to process applications

SBA Loan Payment Subsidies and Payment Deferrals (Not available for Non-Profits)

The following is a summary of certain provisions in the CARES Act. Before taking any action regarding the CARES Act, we recommend you consult with your financial, tax and legal advisors as appropriate. 

Information

  • SBA payment deferral of up to 6 months of principal, interest and fees for eligible SBA loans Waiver of limits on maximum maturity for eligible loans given deferral and extended maturity in the year following enactment of the CARES Act.
  • PLEASE CONTACT YOUR LENDER IF YOU CURRENTLY HAVE AN SBA LOAN TO DISCUSS ELIGIBILITY AND PAYMENT PROCEDURES

Benefits

  • SBA pays the principal, interest, and fees owed for loans in regular servicing status, whether on deferment or not, that were made before the enactment of the Act for the 6-month period following the next payment due date, and for any such loans that were made within 6 months after the date of enactment of the CARES Act, six months from the date the first payment is otherwise due
  • SBA shall make payments to the lender not later than 30 days from when the first eligible payment is due and those payments shall be applied such that the borrower is relieved of any obligation to pay that amount
  • Waiver of limits on maximum loan maturity for loans given deferral and extended maturity during the year following enactment of the CARES Act

General Eligibility

  • SBA §7(a) Loans and loans made by an intermediary using §7(a) loans or grants
  • Currently no apparent application requirement Paycheck Protection Loans and EIDLs are not eligible

Next Steps

  • Federal regulations to establish program procedures SBA establishment of lender payment procedures
  • PLEASE CONTACT YOUR LENDER IF YOU CURRENTLY HAVE AN SBA LOAN TO DISCUSS ELIGIBILITY AND PAYMENT PROCEDURES

Emergency Economic Injury Disaster Loans (“EIDLs”)

The following is a summary of certain provisions in the CARES Act. Before taking any action regarding the CARES Act, we recommend you consult with your financial, tax and legal advisors as appropriate. 

Information

  • EIDL disaster relief loan program provides small businesses with working capital loans of up to $2 million to help overcome the temporary loss of revenue they are experiencing
  • Available to eligible small businesses in all U.S. States and Territories in response to the COVID-19 outbreak
  • Provides for advances of up to $10,000 within three days of applying
  • Program period between January 31, 2020 and December 31, 2020

Benefits

  • EIDL disaster relief loans in all U.S. States and Territories in response to the COVID-19 outbreak
  • May request an advance of up to $10,000 within three days after the SBA receives an application (subject to verification of program eligibility) and is not subject to repayment, even if the loan request is ultimately denied
  • Loan proceeds for use to pay paid sick leave due to COVID-19, payroll, increased costs due to supply chain disruption, mortgage and rent payments and other obligations that cannot be met due to revenue losses
  • Waives the requirement of personal guarantees for loans up to $200,000, the requirement that the applicant must be in business for a year (but must be in operation on January 31, 2020), and the credit elsewhere test

General Eligibility

  • Businesses with no more than 500 employees
  • Expands the type of eligible businesses and includes non-profits
  • May be approved solely on the bases of credit score or by use of alternative methods to gauge the applicant’s ability to repay

Next Steps

  • Federal regulations required to fully assess eligibility and complete applications

Coronavirus Stabilization Act Loans

The following is a summary of certain provisions in the CARES Act. Before taking any action regarding the CARES Act, we recommend you consult with your financial, tax and legal advisors as appropriate. 

Information

  • Authorizes the Treasury Secretary to make up to $500 billion worth of loans and loan guarantees to eligible businesses, non-profits, states, and municipalities
  • No more than $25 billion can be loaned to passenger air carriers, no more than $4 billion to air cargo carriers, and no more than $17 billion to businesses important to maintaining national security
  • Specific loan program for mid-sized businesses and non-profits with between 500 and 10,000 employees

Benefits

  • Enhances access to credit for mid-sized and large organizations impacted by COVID-19
  • Mid-sized businesses and non-profits will not be required to make payments for at least 6 months
  • Mid-sized businesses and non-profit loan interest rate no greater than 2%
  • No loan forgiveness
  • Other loan terms to be determined and may include warrants, options and other equity features

General Eligibility

  • Eligible businesses include passenger air carriers or any other business that has not already received adequate economic relief in the form of loans or loan guarantees under other provisions of the CARES Act
  • Must adhere to restrictions on the payment of dividends, stock repurchases and employee compensation
  • No reduction in force greater than 10% before September 2020
  • Eligible mid-sized organizations required to certify intent to maintain at least 90 percent of their current workforce, not outsource or offshore jobs and certain other matters relating to union activity

Next Steps

  • Federal regulations to establish program procedures
  • It is anticipated that this program will be administered directly by the U.S. Treasury Department and the Federal Reserve

Multi-Family Mortgage Forbearance

The following is a summary of certain provisions in the CARES Act. Before taking any action regarding the CARES Act, we recommend you consult with your financial, tax and legal advisors as appropriate.

Information

  • Up to 90 days of forbearance for multifamily borrowers with a federally backed multifamily mortgage loan who have experienced a financial hardship

Benefits

  • The opportunity to defer payments due to COVID-19 related hardship for 30 days with extensions for an additional 60 days
  • Not obligatory and forbearance can be revoked

General Eligibility

  • Mortgages on real property designed for five or more families that are purchased, insured, or assisted by Fannie Mae, Freddie Mac, or HUD
  • May not evict or charge late fees to tenants for the duration of the forbearance period

Next Steps

  • Federal regulations to establish program procedures Submit a request for forbearance
  • If you have a multi-family mortgage with us and would like to make a request for forbearance, please click here

1For purposes of this safe harbor, a borrower must include its affiliates to the extent required under the interim final.