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FREQUENTLY ASKED QUESTIONS

CARES ACT’S PAYCHECK PROTECTION PROGRAM

(PPP)

The program would provide cash-flow assistance through 100 percent federally

guaranteed loans to employers who maintain their payroll during this emergency. If

employers maintain their payroll, the loans would be forgiven, which would help workers

remain employed, as well as help affected small businesses and our economy to snap-

back quicker after the crisis.

Question: What is the role of the Small Business Administration (SBA)?

Answer: The SBA approved banks will be providing the loans for the PPP to the small

businesses and work directly with these small business in applying and lending the

Question: What is the role of the small business?

Answer: Small Businesses should begin organizing their documentation needed for

this program (see below). It is strongly suggested the small business reaches out to

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Question: What small businesses and organizations are eligible for the PPP loan?

Answer: A variety of small businesses and organizations are eligible, as well as

independent contractors and sole proprietors:

- A small business with fewer than 500 employees

- A small business that otherwise meets the SBA’s size standard

- A 501(c)(3) with fewer than 500 employees

- •An individual who operates as a sole proprietor

- If you are operating as a franchise or receive financial assistance from an

approved Small Business Investment Company the normal affiliation rules do

Please note that employees include full-time, part-time and any other status.

Question: What will the bank ask when applying for the PPP loan?

Answer: Unlike traditional and alternative financing, this program is intended to provide

- The uncertainty of current economic conditions makes the loan request

necessary to support ongoing operations

- The borrower will use the loan proceeds to retain workers and maintain

payroll or make mortgage, lease, and utility payments

- Borrower does not have an application pending for a loan duplicative of the

purpose and amounts applied for in the PPP loan

- From Feb. 15, 2020 to Dec. 31, 2020, the borrower has not received a loan

duplicative of the purpose and amounts applied for here (Note: There is an

opportunity to fold emergency loans made between Jan. 31, 2020 and the

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Question: How do I know if my bank is an SBA preferred lender and if not, which

banks are?

Answer: The SBA has a list of SBA preferred lenders through their Lender Match tool

on their website. A full list of lenders in Florida can be found at the end of this document.

insurance premiums

- Payment of any retirement benefit

- Payment of State or local tax assessed on the compensation of employees

Question: What other cost can I pay with the PPP loan?

Answer: In addition to covering the payroll of the employees, the loan can be used for:

- Costs related to the continuation of group health care benefits during periods

of paid sick, medical, or family leave, and insurance premiums

- Employee salaries, commissions, or similar compensations

- Payments of interest on any mortgage obligation (which shall not include any

prepayment of or payment of principal on a mortgage obligation)

- Rent (including rent under a lease agreement)

- Utilities

- Interest on any other debt obligations that were incurred before the covered

period

- Employee/owner compensation over $100,000

- Taxes imposed or withheld under chapters 21, 22, and 24 of the IRS code

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- Compensation of employees whose principal place of residence is outside of

- Qualified sick and family leave for which a credit is allowed under sections

7001 and 7003 of the Families First Coronavirus Response Act

Question: How do I know how much I can borrow under the PPP loan program?

Answer: The amount of each loan is limited to the lesser of (a) $10 million or (b) the

borrower’s average total monthly “payroll costs” for the 1-year period ending on the date

the loan is made multiplied by 2.5, plus any refinanced SBA economic injury disaster

- salary, wage, commission, or similar compensation;

- payment of cash tip or equivalent;

- payment for vacation, parental, family, medical, or sick leave

- allowance for dismissal or separation

- payment required for the provisions of group health care benefits, including

insurance premiums

- payment of any retirement benefit

- payment of state or local tax assessed on the compensation of the employee

similar compensation and that is in an amount that is not more than $100,000 in one

year, as pro-rated for the covered period.

Please note that payments to an independent contractor or sole proprietor should be

excluded from the eligible business’s payroll costs. However, an independent contractor

or sole proprietor will itself be eligible for a loan under the PPP, if it satisfies the

applicable requirements.

Question: Do I include federal taxes when determining my payroll costs for purposes

of the maximum loan amount, allowable uses of a PPP loan, and the amount of a loan

that may be forgiven?

Answer: Payroll costs are calculated on a gross basis without regard to (i.e., not

including subtractions or additions based on) federal taxes imposed or withheld, such as

the employee’s and employer’s share of Federal Insurance Contributions Act (FICA)

and income taxes required to be withheld from employees. As a result, payroll costs are

not reduced by taxes imposed on an employee and required to be withheld by the

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example, an employee who earned $4,000 per month in gross wages, from which $500

in federal taxes was withheld, would count as $4,000 in payroll costs. The employee

would receive $3,500, and $500 would be paid to the federal government. However, the

employer-side federal payroll taxes imposed on the $4,000 in wages are excluded from

payroll costs.

average monthly payroll cost. For example, minimal review of calculations based on a

payroll report by a recognized third-party payroll processor would be reasonable. In

amounts required to be excluded from payroll costs.

If the lender identifies errors in the borrower’s calculation or material lack of

substantiation in the borrower’s supporting documents, the lender should work with the

borrower to remedy the issue.

• employer contributions to defined-benefit or defined-contribution retirement plans;

• payment for the provision of employee benefits consisting of group health care

• payment of state and local taxes assessed on compensation of employees.

Question: Do I need to put up collateral in order to receive the PPP loan?

Answer: During the Covered Period, Borrowers are not required to provide collateral

security for the loans or cause owners or affiliates to guarantee the loans. I.e. no

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Question: Although this is called a loan, there is the opportunity to get the loan

forgiven. How is the amount calculated?

Answer: Forgiveness on a covered loan is equal to the sum of the following payroll

costs incurred during the covered 8-week period compared to the previous year or time

period, proportionate to maintaining employees and wages (excluding compensation

average number of full-time employees per month during the eight-week period

following origination of the loan, and the denominator is, at the election of the borrower,

one of the two following values: (a) the average number of full-time employees per

month between Feb. 15, 2019, and June 30, 2019; or (b) the average number of full-

Employees terminated between February 15, 2020 and 30 days after passage of the

CARES Act, but rehired by June 30, 2020, qualify in the numerator so long as they’re

fully paid as if they weren’t terminated. A borrower will need to calculate their average

number of full-time employees in both 2019 and between January 1, 2020 and ending

on February 29, 2020 to determine the most favorable result. Accordingly, if a

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amount that is being forgiven was used in accordance with the program’s

guidelines for use.

Question: What happens after the forgiveness period?

Answer: Any loan amounts not forgiven at the end of one year is carried forward as an

ongoing loan with your bank.

Answer: Reductions in employment or wages that occur during the period beginning on

February 15, 2020, and ending 30 days after enactment of the CARES Act, (as

compared to February 15, 2020) shall not reduce the amount of loan forgiveness IF by

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Relevant information from a Schedule R (Form 941), Allocation Schedule for Aggregate

Form 941 Filers, attached to the PEO’s or other payroll provider’s Form 941, Employer’s

Quarterly Federal Tax Return, should be used if it is available; otherwise, the eligible

borrower should obtain a statement from the payroll provider documenting the amount

of wages and payroll taxes. In addition, employees of the eligible borrower will not be

considered employees of the eligible borrower’s payroll provider or PEO.

Question: What do I need to do if I have other SBA loans?

Answer: Prior to applying for PPP loan, all prospective borrowers should review all

existing loan agreements, notes and bond or trust indentures to determine if the

incurring additional debt will cause a default or otherwise violate the terms of those

agreements. Companies may also be guarantors of their parent entity’s existing debt,

and may, therefore, be subject to the same restrictions. Financial covenants, permitted

debt definitions, permitted investments, and other terms of loan documents may need

modifications to allow borrowers to access this government relief without technical

defaults. Businesses with existing debt should consult with their legal counsel and

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The State of Florida Department of Economic Opportunity Emergency Bridge Loan

requires U.S. personal taxes, U.S. business taxes and U.S. issued license/identification.

Also review SunBiz information to show the business was in business prior to the

incident, is registered to do business in Florida, and has a primary location in the

disaster area.