Paycheck Protection Program

The following expenses are eligible for forgiveness:

• Payroll costs (as described in the Interim Final Rule 1), including compensation to owners (as described in Interim Final Rule 3) that are paid or incurred during the Covered Period or Alternative PAyroll Covered Period.
  • Payroll costs incurred but not paid during the Borrower’s last pay period of the Covered Period are eligible for forgiveness if paid on or before the next regular payroll date
  • Payroll costs that were both paid and incurred can only be counted once toward the forgiveness amount
• Non-Payroll costs paid or incurred during the Covered Period.  Non-payroll costs incurred during the Covered Period must be paid on or before the next regular billing date, even if the billing date is after the Covered Period. Non-payroll costs may not exceed 40% of the loan forgiveness request. The following non-payroll costs are eligible for forgiveness:
  • Interest payments on business mortgage obligations (not including the pre-payment of interest or any payment of principal) entered into before February 15, 2020
  • Business rent/lease payments (on real or personal property) if the lease was entered into before February 15, 2020
  • Business utility payments (e.g., electricity, gas, water, transportation, telephone, internet access) if the service began before February 15, 2020

The Covered Period begins on the loan origination date and now runs for 24 weeks (or until December 31, 2020, if that occurs before the end of the 24-week period). Borrowers receiving a PPP loan before June 5, 2020 may still elect a Covered Period that runs for 8 weeks after loan origination.

The Alternative Payroll Covered Period can be used for administrative convenience for Borrowers with a biweekly (or more frequent) payroll schedule.  Borrowers may elect to calculate eligible payroll costs using the 24-week period (or 8-week period, if elected) that begins on the first day of their first pay period following their PPP loan disbursement date.

You will be required to submit documentation supporting your application for loan forgiveness. Subject to additional SBA guidance, we anticipate that borrowers will be expected to submit the following documents:

• The SBA-issued PPP Loan Forgiveness Calculation Form
• The SBA-issued PPP Schedule A Worksheet
• Payroll documentation verifying the eligible employee cash compensation and non-cash benefit payments consisting of each of the following:
  • Bank account statements or third-party payroll service provider reports;
  • Tax forms; and
  • Payment receipts, cancelled checks, or account statements
• Employee documentation verifying the number of full-time equivalent (FTE) employees
  • Average number of FTE employees on payroll per week between February 15, 2019 and June 30, 2019; and
  • Average number of FTE employees on payroll per week between January 1, 2020 and February 29, 2020
  • Seasonal employers can provide the average number of FTE employees on payroll per week between February 15, 2019 and June 30, 2019; between January 1, 2020 and February 29, 2020; or any consecutive 12-week period between May 1, 2019 and September 15, 2019
• Non-payroll documentation verifying the existence of obligations before February 15, 2020 and eligible payments from the Covered Period. Examples include:
  • Business mortgage interest payments: copy of lender amortization schedule and receipts or cancelled checks; or lender account statements verifying interest amounts and eligible payments.
  • Business rent or lease payments: copy of current lease agreement and receipts or cancelled checks; or lessor account statements verifying eligible payments.
  • Business utility payments: copy of invoices and receipts, cancelled checks, or account statements verifying those eligible payments.

If you do not provide supporting documentation, the loan will not be eligible for forgiveness.

SBA Loan Forgiveness Application (Standard)
SBA Loan Forgiveness Application Instructions (Standard)
SBA Loan Forgiveness Form EZ
SBA Loan Forgiveness Form EZ Instructions
Interim Final Rule on Loan Forgiveness
Interim Final Rule on SBA Loan Review Procedures and Related Borrower and Lender Responsibilities
Interim Final Rule on Revisions to the Third and Sixth Interim Final Rules
Interim Final Rule on Revisions to Loan Forgiveness Interim Final Rule and SBA Loan Review Procedures Interim Final Rule

Your total eligible forgiveness amount may be reduced if:

• You reduced the number of your full-time equivalent (FTE) employees, or you reduced compensation for those employees – unless you rehire employees, or restore their compensation, by December 31, 2020. In addition, it will no longer impair your ability as a borrower to receive forgiveness if you can document and attest to:
  • your inability to rehire former employees;
  • your inability to rehire similarly qualified employees on or before December 31, 2020; or
  • your inability to return to the same level of business activity as you had at or before February 15, due to COVID-19-related compliance requirements established by federal agencies.
• You received an Economic Injury Disaster Loan (EIDL) emergency grant from the SBA.
• You used PPP loan proceeds for unauthorized purposes.

Borrowers will be responsible for repaying any amounts not forgiven by the SBA.  PPP loans have a fixed interest rate of 1.00%. Any loan approved on or after June 5, 2020 will have a maturity of five years, and any loan approved before June 5, 2020 will have a maturity of two years, unless the borrower and PNC agree to extend the period to five years. 

If you apply for forgiveness, your payments will be deferred until PNC receives your approved loan forgiveness funds from the SBA. If you don’t apply for forgiveness, your payments could be deferred for up to 16 months – the deferral period has been extended for 10 months following whichever date occurs first – the date that is 24 weeks after your loan was funded, or December 31, 2020.

Up to 100% of the principal amount and any accrued interest of the loan may be forgiven if you use the proceeds on qualifying expenses. However, there are certain actions that may reduce the amount of forgiveness, such as reducing the number of employees or reducing employee salaries or wages. Only up to 40% of the forgiven loan amount can be for non-payroll costs.

Outstanding loan amounts bear an interest rate of 1.00%. Any loan approved on or after June 5, 2020 will have a maturity of five years, and any loan approved before June 5, 2020 will have a maturity of two years, unless the borrower and PNC agree to extend the period to five years. At the end of the deferral period, any accrued interest that has not been forgiven will be due.

If you apply for forgiveness, your payments will be deferred until PNC receives your approved loan forgiveness funds from the SBA. If you don’t apply for forgiveness, your payments could be deferred for up to 16 months – the deferral period has been extended for 10 months following whichever date occurs first – the date that is 24 weeks after your loan was funded, or December 31, 2020.  Monthly payments of principal plus interest will begin after the deferral period.

PNC will alert borrowers with an email notification once the PNC digital application portal is available to accept applications.  Borrowers will be provided login credentials and instructions on how to initiate the loan forgiveness process through PNC’s digital portal.

We are currently incorporating the revised and new forms into our digital loan forgiveness application and will prompt borrowers to complete the application through the portal.  To ensure consistency and clarity for our clients, we will not be accepting applications based on the initial SBA application and we will not be accepting paper applications.

The SBA’s “EZ” form will allow certain borrowers to use a streamlined forgiveness application, including reduced documentation requirements.  Borrowers can apply for forgiveness using this form if one of the following is applicable:

• You are a self-employed individual, independent contractor, or sole proprietor who had no employees at the time of your PPP loan application and you did not include any employee salaries in the computation of average monthly payroll.
• You did not reduce annual salary or hourly wages of any employee by more than 25% AND did not reduce the number of full-time equivalent (FTE) employees (or the average paid hours of employees).
• You did not reduce annual salary or hourly wages of any employee by more than 25% AND were unable to operate at pre-COVID-19 levels of business activity during the covered period due to compliance with government standards of sanitation, social distancing, or any other safety requirement related to COVID-19.

No.  PNC will let borrowers know when our digital portal is ready to accept forgiveness applications. We are not accepting paper applications at this time.

PNC anticipates providing borrowers with their SBA PPP Loan Number and Lender PPP Loan Number through the digital portal.

You can reference the revised SBA Loan Forgiveness Application and Instructions and the new SBA Loan Forgiveness Form EZ and Instructions on the Treasury site.

In general, payroll documentation, full-time equivalent (FTE) headcount documentation, and non-payroll documentation will be required.

The PPP is a federal loan program that helps small- and medium-sized businesses impacted by the coronavirus (COVID-19) to retain their workforce. The loan is an SBA 7(a) loan with the following terms:

• 1.00% fixed interest rate.
• Deferred payments for 6 months.
• Repaid over a 2-year term.
• Up to 100% of the principal and accrued interest may be forgiven after 8 weeks.

The Paycheck Protection Program was signed into law in the wake of the COVID-19 global health crisis. One of this program’s significant features is that you can apply for loan forgiveness after receiving the funds. Forgiveness can be up to 100% of the loan and accrued interest.  Another unique feature is the loan deferment, meaning you won’t have to pay principal and interest on your loan for the first 6 months.

This loan will be packaged as an SBA 7(a) loan program. Businesses can apply through PNC Bank, a preferred SBA lender (or another qualified SBA lender). SBA and PNC Bank application fees will be waived for all borrowers. Lenders will have delegated authority to make and approve loans without requiring SBA review or approval – this streamlined process is designed to get capital in the hands of businesses quickly. If you are a current PNC customer, your Business Banker or Relationship Manager can show you how to apply.

Small- and medium-sized businesses that were in operation on or before February 15, 2020 with 500 or fewer full- or part-time employees (independent contractors can apply on their own and do not count toward the employee count), are generally eligible to apply for this loan. Additionally, the business must have paid employee salaries and payroll taxes (or paid independent contractors, as reported on a Form 1099-MISC).

Businesses with more than 500 employees may still qualify for the program by meeting the SBA’s definition of a “small business concern.” A business may also qualify if it meets the SBA employee-based or revenue-based size standard corresponding to its primary industry. Details on SBA size standards can be found here.

Calculate your maximum loan amount by multiplying your business’s average monthly payroll costs by 2.5. For most businesses, average monthly payroll costs will be based on the full 2019 calendar year or another consecutive period of twelve months ending in January, February, or March 2020. Your monthly payroll includes wages, tips, group health, retirement benefits and employer-paid taxes, but excludes the amount of compensation to individuals in excess of $100,000 and compensation paid to independent contractors. The maximum loan amount is the lesser of that value or $10,000,000.

Seasonal businesses may use average monthly payroll costs for the period between February 15, 2019, or March 1, 2019, and June 30, 2019. Recently established businesses may use average monthly payroll costs for the period from January 1, 2020 through February 29, 2020 if they were not in operation for a full twelve months.

In order to submit your application online, you will need to print application materials, sign, scan, and upload documents.

Based on current guidance, you should gather the following documents to apply for a Paycheck Protection Program loan:

• IRS payroll tax filings (e.g., 940, 941, 944)
• 2019 1099-MISCs (for applicants filing as independent contractors)
• Payroll processor records
• Health insurance premium expenses (required if group healthcare costs are included in payroll calculations)
• Retirement plan expenses (required if payments into retirement accounts are included in payroll calculations)
• Other supporting documentation for the relevant time period (e.g., income and expense statements)

You will need these documents for the relevant time period. For most non-seasonal businesses, this time period will be the full calendar year 2019 (or a consecutive twelve-month period ending in the first quarter of 2020). For seasonal or recently established businesses, it may be shorter.

No, payments to independent contractors do not count toward a company's payroll costs used to calculate the PPP loan amount. Independent contractors can directly apply for a PPP loan on their own.

No. The Paycheck Protection Program does not require collateral or a personal guarantee.

Timing is dependent on your accurate completion and submission of information to PNC Bank and volume of requests. Once PNC Bank approves your loan, the SBA registers it and an executed promissory note is delivered to PNC Bank, funds can be disbursed as fast as possible by wire transfer or ACH payment directly into your PNC business deposit account.

Approved uses of proceeds include:

• Payroll costs (at least 75% of all loan proceeds must be used for payroll costs)
• Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums
  
• mortgage interest payments (but not mortgage prepayments or principal payments)
• rent payments
• utility payments
• interest payments on any other debt obligations that were incurred before February 15, 2020; and/or
• refinancing an SBA Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020.

The interest rate for Paycheck Protection Program loans is set by the SBA and is 1.00%.

The program is administered by SBA lenders and loans may be originated through June 30, 2020 contingent upon the availability of program funds.

There may be more applicants and requests for loans than available funds from the SBA. If that occurs, not every qualified applicant will receive loan proceeds under the Paycheck Protection Program.

The Paycheck Protection Program loan will not affect your future SBA loan funding or total dollars allowed from the SBA.

Yes, customers can use the Paycheck Protection Program loan proceeds to pay PNC Bank interest. However, any amount applied to non-mortgage debt or principal payments will not qualify for loan forgiveness.

If you are a current PNC Bank customer, reach out to your Business Banker or Relationship Manager. If you are not a PNC customer, we encourage you to research your options on our website and determine which program is the best fit for your business.

No. The Government limits each eligible borrower to only one PPP loan. This means that if you apply for a PPP loan you should consider applying for the maximum amount that you are eligible to receive.

Starting today, with the issuance of the final rule, borrowers cannot apply for both an Economic Injury Disaster Loan (EIDL) and a PPP loan:

• Note, if a borrower received an EIDL between January 31, 2020 and April 3, 2020 it does NOT impact their ability to apply for a PPP loan.
• If an EIDL loan received between January 31, 2020 and April 3, 2020 was used for payroll costs, your PPP loan must be used to refinance your EIDL loan (and the amount of the PPP loan is increased by the outstanding EIDL, subject to the $10mm cap).

It’s critical for you to weigh all options available to you to ensure the best financial decision for your business. To apply for an EIDL, you must apply directly through the Small Business Administration. More information on the EIDL can be found here.

Small Business Administration (SBA) Loans with PNC

SBA COVID-19 Disaster Assistance