Open for Business: New York

The overarching focus of the Paycheck Protection Program, a part of the CARES Act, is keeping
workers paid and employed, so it prioritizes forgiveness for amounts that go to payroll costs. It also limits the amount of non-payroll costs that can be forgiven to 25 percent of the total
amount forgiven.

This is intended to ensure that the funds available for forgiveness are
primarily directed toward payroll protection. SBA is expected to issue additional guidance on
loan forgiveness soon.

Your PPP loan may be forgiven to the extent you use the proceeds for payroll costs, mortgage interest/rent, and utilities payments during the first 8 weeks after loan is funded. Note: No more than 25% of the loan forgiveness amount can come from non-payroll costs. You will also need to maintain your staff and payroll during this eight-week period. Your loan forgiveness will be reduced if you:

• Decrease your full-time employee headcount. You have until June 30, 2020 to restore your full-time headcount for any changes made between February 15, 2020 and April 26, 2020

• Decrease salaries and wages by more than 25% for any employee who made less than $100,000 annualized in 2019. You have until June 30, 2020 to restore employee salaries or wages that were reduced by more than 25%

Subject to the exclusions below, payroll costs including salary/wages/commissions/tips, employee benefits, state and local taxes on compensation; For a sole proprietor/independent contractor: wages, commissions, income, or net earnings from self employment.

• Interest on mortgage obligations, incurred before February 15, 2020
• Rent, under lease agreements in force before February 15, 2020
• Utilities, for which service began before February 15, 2020

At least 75 percent of your PPP loan must be used for payroll costs, such as those listed above. No more than 25% can be attributable to rent/mortgage or utilities. Other expenses are not eligible for loan forgiveness.

• Employee/owner compensation at an annual salary rate over $100,000
• Taxes imposed or withheld under chapters 21, 22, and 24 of the IRS code
• Compensation of employees whose principal place of residence is outside of the U.S.
• Qualified sick and family leave for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act

• Any compensation to U.S.-based employees, including salary, wages, commissions or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips)
• Payment for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees; and for an independent contractor or sole proprietor, wage, commissions, income, or net earnings from self-employment or similar compensation.

• Any compensation for non U.S-based employees
• Compensation of an individual employee above an annual salary rate of $100,000, prorated as necessary
• Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be withheld from employees; and
• Qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (Public Law 116–127)

Yes. This program is retroactive to February 15, 2020, to help hire back workers who may have already been laid off. Loan forgiveness is based on your ability to maintain or quickly rehire employees, and to maintain salary levels. Your loan forgiveness will be reduced if you:

• Decrease your full-time employee headcount. You have until June 30, 2020 to restore your full-time headcount for any changes made between February 15, 2020 and April 26, 2020
• Decrease salaries and wages by more than 25% for any employee who made less than $100,000 annualized in 2019. You have until June 30, 2020 to restore employee salaries or wages that were reduced by more than 25%

After the loan forgiveness period for your PPP loan ends, your loan’s principal amount will be calculated as the original loan amount less all expenses that qualified for forgiveness. Following a 6-month payment deferral period (which begins from the date of the loan), the principal amount of the loan, along with accrued interest at 1% per annum, must be repaid over the following 18 months.

Yes. There are no prepayment penalties or fees.

You will be able to submit a request to the bank. This request will require documentation verifying the number of full-time equivalent employees and their pay rates, as well as payments on eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees on your payroll and to make eligible mortgage interest, rent, and utility payments. The bank must make a decision on the forgiveness within 60 days.

The bank will reach out to you soon for further instructions on how to submit necessary documentation for loan forgiveness.