Paycheck Protection Program

Bank of Botetourt began accepting applications for the PPP Loan Forgiveness on Monday, September 14, 2020.

Bank of Botetourt is an approved SBA lender, and we value all of our small business customers. Current law dictates that the SBA Paycheck Protection Program (PPP) close at the end of August 8, 2020. As such, SBA is no longer accepting PPP applications from participating lenders.

If this program were to be extended or provided additional funding, Bank of Botetourt will continue to work with businesses.

The PPP program, may provide some critical benefits to businesses, including:

1. Cash to cover select business expenses (such as employee salaries and payroll support, retirement benefits, rent or mortgage and utilities payments, insurance premiums)

2. 6 months of deferred loan payments

3. Potential Loan forgiveness (a portion, or possibly all, of your loan may be forgiven)

Key Points to Know:  

  • Maximum dollar amount of a PPP loan: 2.5x of your average total monthly payments for payroll costs of the business during the 1-year period before the loan is made. Payroll costs include salary, wage, retirement benefits, vacation, parental, family, medical or sick leave, severance, health care benefits, and local taxes.

PPP Loan Forgiveness Resources

As part of Bank of Botetourt’s ongoing efforts to help small businesses overcome the unprecedented challenges of forced closures and subsequent loss of revenue, we want to help you maximize your loan forgiveness opportunity. Please see below for information about how to apply for Paycheck Protection Program loan forgiveness along with additional resources to help you prepare for forgiveness.

Loan Details and Forgiveness

SBA will forgive loans if all employee retention criteria are met, and the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60% of the forgiven amount must have been used for payroll).

Click here to read more about PPP loan forgiveness.

Frequently Asked Questions about PPP Loan Forgiveness 

  • PPP loans have an interest rate of 1%.
  • Loans issued prior to June 5 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 years.
  • Loan payments will be deferred for six months.
  • No collateral or personal guarantees are required.
  • Neither the government nor lenders will charge small businesses any fees.

Loan Forgiveness

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:  

  • Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
  • Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the 24-week period after receiving their PPP loan
  • Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
  • Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
  • Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined

Click here to download the Bank of Botetourt PPP Forgiveness Checklist
Click here to download the Paycheck Protection Program Loan Forgiveness Application (06-16-2020) 
Click here to download instructions for the Paycheck Protection Program Loan Forgiveness Application (06-16-2020) 
Click here to download the Paycheck Protection Program 3508EZ Loan Forgiveness Application 
Click here to download instructions for the Paycheck Protection Program EZ Loan Forgiveness Application 
Click here to download the Paycheck Protection Program Loan Forgiveness Application 
Click here to download instructions for the Paycheck Protection Program Loan Forgiveness Application 
Click here to download Application form 3508S for PPP loans $50,000 and less.
Click here to download instructions to fill our form 3508S for PPP loans $50,000 or less.

PPP Forgiveness Required Documentation

Payroll

Documentation verifying the eligible cash compensation and non-cash benefit payments from
the Covered Period or the Alternative Payroll Covered Period consisting of each of the
following:

  • Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.
  • Tax forms (or equivalent third-party payroll service provider reports) for the periods that
    overlap with the Covered Period or the Alternative Payroll Covered Period:

    *Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and 

           *State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.

  • Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the Borrower included in the forgiveness amount.

Non-payroll

Documentation verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period. (Remember: this only applies if you included non-payroll expenses in the amount for which you are trying to seek forgiveness.)

  • Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; or lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments.
  • Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period, or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.
  • Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.

Available Resources:

PPP Loan Forgiveness Calculation Form
SBA’s information on Paycheck Protection Program

If you need to discuss further or speak with someone directly, please contact Bank of Botetourt at 540-591-5000, covidloan@bankofbotetourt or call your lender.  

Last Updated: October 9, 2020

 

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