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And update on Coronavirus (COVID-19)

Paycheck Protection Program

For more information about the program, please call the Bank or contact us at

The COVID-19 pandemic continues to halt daily life with shelter-in-place orders. Small businesses are being forced to shut down, and now owners are struggling to come up with the cash to keep running.

The federal government is stepping in to help with the Paycheck Protection Program, which was included in the Coronavirus Aid, Relief and Economic Security (CARES) Act passed on March 27. The Paycheck Protection Program provides $349 billion in forgivable loans to help small businesses stay afloat during the COVID-19 crisis.

What Businesses Qualify?

Small businesses and nonprofits with 500 or fewer employees can apply for loans through the Paycheck Protection Program—that includes sole proprietors and independent contractors. Small businesses in the hotel and food service industries, and that are franchises according to the SBA’s guidelines, may qualify if they have more than 500 employees. One loan will be granted per business, and a taxpayer identification number (TIN) is required to apply.

How Much Money Can I Get?

The maximum loan granted from the PPP will be equal to 2.5 times the average monthly payroll costs for the previous calendar year, up to $10 million.

Payroll costs only apply to annual salaries up to $100,000; while calculating your monthly payroll costs, you’ll have to subtract any excess salary amount over that cap. For example, if an employee makes $125,000 per year, you’ll only be able to include $100,000 of their annual salary in your calculation.

Additionally, only employees whose principal place of residence is within the United States qualify in payroll costs.

Costs Covered Under the Paycheck Protection Program

The Paycheck Protection Program (PPP) will give small businesses loans to continue to pay employees and cover other business expenses during the COVID-19 crisis. All loans have a 1% fixed interest rate, require no collateral or guarantor (meaning owners don’t need to put anything down to back the loan) and will be due in two years with no prepayment penalties or fees. Loan payments will also be deferred for six months; during that time, interest will accrue.

The goal of these loans is to keep workers employed during the pandemic. That means it’s important to know what your payroll costs are in order to determine how much to borrow. According to the U.S. Department of the Treasury , these costs include:

  • Salary, wages, commissions and tips capped at $100,000 per year for each employee
  • Costs of benefits including vacation, parental, family, medical and sick leave
  • Allowance for separation or dismissal of employees
  • Payments for health care benefits
  • Payments for retirement benefits
  • State and local taxes on compensation
  • Sole proprietors and independent contractors aren’t eligible to be included in a business’ payroll costs. These individuals can apply for a loan to cover their own wages, commissions, income or net earnings from self-employment, up to $100,000 per year.

If a small business uses a Paycheck Protection Program loan for the specified expenses over an eight-week period, the loan will be forgiven. Mortgage interest, rent and utility payments are also eligible for payment with the loan funds (up to 25% of the loan can be spent on these costs).

How Will the Loans Be Forgiven?

Loans granted under the Paycheck Protection Program will be forgiven in full — essentially making them grants from the government — only if certain requirements are met. Companies must keep workers on their payrolls for an eight-week period after the loan is granted, and the businesses can only use the loan for the other costs listed above.

Loan forgiveness will be reduced depending on how businesses use the money. If staff counts are reduced, or salaries for employees who earn less than $100,000 annually are reduced by more than 25%, then the business must repay the loan. Businesses have until June 30, 2020 to restore full-time employment and salary levels that were changed between February 15 and April 26.

Businesses will need to submit a request for forgiveness to the lender that services their loan. According to the Treasury, the request must include documents verifying employees and pay rates, as well as what the loan money was used for.

What Do I Need to Apply for a Paycheck Protection Program Loan?

Below is the information that Phenix-Girard Bank will need to begin processing your application. Please complete the application and return to your loan officer with the documents requested. If you need further assistance please email us at

  • A completed PPP Loan Application. Application can be found here. Click here
  • Applicable information of anyone who helped compile the requested information and/or complete the application
  • Tax returns completed for 2019 or 2019 Profit and Loss (P&L) and Balance Sheet
  • Payroll reports showing payroll costs for the last year including 2019 and 2020 year to date for all officers and employees:
    • State and local taxes (form 940, 941, 944 and W-3)
    • 1099s for independent contractors (if applicable) o Gross wages
    • Paid time off
    • Paid vacation
    • Paid family medical leave (if applicable)
  • Documents for:
    • Funds received in the form of an Economic Injury since January 31, 2020
    • Payments for group health care benefits and premiums paid in 2019 and 2020 YTD
    • Payment of any retirement benefits paid in 2019 and 2020 YTD
  • Copies of governing documents (e.g. partnership agreements)
    • Please have your board and officers ready to adopt borrowing resolutions
  • Costs that are forgivable are only for the eight weeks after receiving the loan
    • If applicable, you must be able to verify:
      • Payments for payroll (e.g. quarterly IRS forms 940, 941, 944 or W-3)
      • Mortgage interest, rent and utilities