Paycheck Protection Program
Woman preparing packages for her small business
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SBA Paycheck Protection Program
We understand this is an incredibly stressful time for our business customers and that is why Commerce is working to keep you informed about the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) and the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (“Economic Aid Act”). To mitigate potential fraud and other security concerns, our efforts remain focused on servicing our customers with established Commerce Bank business deposit accounts.
About the Paycheck Protection Program
The Paycheck Protection Program (PPP) was designed to help small businesses keep their workers on the payroll and cover expenses such as benefits, mortgage, lease, and utilities over a period of 8- to 24-weeks while facing the current economic uncertainty. Businesses that experienced a temporary loss of revenue due to COVID-19 are eligible for the program and may be eligible for a second draw under the PPP Program.The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law on March 27, 2020 and introduced the new SBA loan program, PPP. This economic relief program provided access to capital for businesses negatively impacted by the COVID-19 pandemic and includes loan forgiveness and payment deferral relief options. These loans are originated through SBA 7(a) lenders, including Commerce Bank.
On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic Aid Act”) became law. The Economic Aid Act extends access to PPP loans through March 31, 2021 and revises certain PPP requirements, such as borrower eligibility, lender eligibility, and PPP application and origination requirements for new PPP loans (first draw), as well as provides general rules relating to previous loan increases (pending additional guidance), origination requirements for second draw PPP loans and loan forgiveness and includes information regarding assisting minority, underserved, Veteran and women-owned businesses.
Resources to help with PPP.
Requirements Overview
Key points regarding PPP loan eligibility, features and terms.
Get details on the Requirements OverviewApplication Checklist
Gather the recommended documentation to prepare for your application.
Get details on the Application ChecklistFirst Draw SBA Guide
Learn how to calculate maximum loan amounts for First Draw PPP loans and what documentation to provide — by business type.
Get details about First Draw SBA GuideSecond Draw SBA Guide
Learn how to calculate revenue reduction and maximum loan amounts including what documentation to provide.
Get details about Second Draw GuidePPP Amendment
Detail of PPP Interim Final Rule #1, as amended by the Economic Aid Act.
Get details about the PPP AmendmentPPP Second Draw Loans
Detail of PPP Interim Final Rule #2, for Second Draw Loans created by the Economic Aid Act.
Get details about PPP Second Draw LoansSBA Disaster Loans
In addition to PPP, learn more about Disaster Assistance options directly through the SBA.
Get details on SBA Disaster LoansTreasury Department FAQs
Frequently asked questions answered by the SBA and U.S. Department of Treasury.
Get details on the Treasury Department FAQsSBA Business Size Standards
Review business size and industry NAICS code standards that qualify a business for SBA programs.
Get details on SBA Business Size StandardsLoan Forgiveness
In order to apply for PPP loan forgiveness, you must apply with the bank or financial organization that assisted with your PPP loan no later than 10 months after the end of your covered period. If your business received a PPP loan through Commerce Bank, you will be notified when you may initiate a digital application for loan forgiveness.
Even though the Small Business Administration (SBA) opened their PPP forgiveness portal on August 10th, there are additional points to consider regarding the timing of submitting applications:
- Congress continues to discuss changes to the SBA PPP forgiveness that may simplify requirements for borrowers
- Customers will not pay interest on the forgiven loan amount
- Payments are deferred until the SBA remits the forgiven amount, or 10 months after the end of the borrower’s covered period (when not applying for forgiveness)
To prepare for loan forgiveness, please view our additional resources to help you through the application process.
The information displayed on this page is based on guidance released by the SBA on 1/19/21 and is subject to change. We continue to modify our online application portal to accommodate the latest changes and you will be notified by email when we are ready to accept your Forgiveness application.
Resources to help you with loan forgiveness.
PPP Loan Forgiveness Application and Instructions
Get prepared for your PPP Loan Forgiveness application with Commerce Bank.
Get details about the PPP Loan Forgiveness ApplicationPPP EZ Loan Forgiveness Application and Instructions
This form is to be used by Commerce Bank’s PPP borrowers who meet certain criteria.
Get details about the PPP EZ Loan Forgiveness ApplicationPPP 3508S Loan Forgiveness Application and Instructions
This form may be used by Commerce Bank’s PPP borrowers who received a PPP loan of $150,000 or less.
Get details on the PPP 3508S Loan Forgiveness Application
Frequently Asked Questions
How do I know if my business is eligible?
Any business concern, 501(c)(3) non-profit organization that is tax exempt under 501(a), 501(c)(19) veterans’ organization that is tax exempt under 501(a) or Tribal business meeting the below eligibility requirements: Business must have 500 or less employees to participate (includes full-time, part-time and those employed on other basis); or must meet the employee size standard established by the SBA for the industry in which the entity operates if larger. For second draw loans, Business must have 300 or less employees.
Special affiliation rule waivers for businesses in the hospitality and dining industries, franchisees holding a franchise listed on the SBA’s registry of approved franchise agreements, or a business that receives assistance from a company licensed under a specific portion of the Small Business Investment Act.
By applying, you are certifying in good faith that the current economic uncertainty makes this loan request necessary to support your ongoing operations.
Special affiliation rule waivers for businesses in the hospitality and dining industries, franchisees holding a franchise listed on the SBA’s registry of approved franchise agreements, or a business that receives assistance from a company licensed under a specific portion of the Small Business Investment Act.
By applying, you are certifying in good faith that the current economic uncertainty makes this loan request necessary to support your ongoing operations.
What are the requirements to obtain the PPP loan?
- The loan is needed to continue operations during the COVID-19 emergency;
- Funds will be used to retain workers and maintain payroll or make mortgage, lease, and utility payments and certain other covered expenses;
- The applicant does not have any other application pending under this program for the same purpose; and
- From February 15, 2020 through December 31, 2020, the applicant has not received duplicative amounts for the same purposes through another loan under Section 7(a).
How can I apply PPP funds to my business?
- Payroll costs (certain exclusions apply)
- Costs of continued group health care benefits during periods of paid sick, medical, or family leave
- Salaries, commissions or similar compensations
- Payments of interest on mortgage obligations
- Rent/lease agreement payments
- Utilities
- Interest on any other debt obligations incurred before the covered period
- Covered operations expenditures
- Covered property damage costs
- Covered supplier costs
- Covered worker protection expenditures
How does the loan work?
- SBA guarantee and ongoing servicing fees are waived.
- 100% loan guaranty
- Maximum loan amount of $10MM for first draw and $2MM for second draw loans
- Loan amount determined by borrower’s total average monthly payroll costs times 2.50. For second draw loans businesses with a NAICS code that begin with 72 may use a 3.50 multiplier.
- No collateral or personal guarantees are permitted to be required.
- No credit elsewhere test
What does 'loan forgiveness' mean?
The Program provides for possible loan forgiveness. The below information is a summary of description of important aspects of the loan forgiveness process but is not an exhaustive list of all requirements or details of the process.
- This process provides the opportunity for indebtedness to be forgiven, and not taxed in an amount (not to exceed the principal amount of the loan) equal to the following costs incurred and payments made during the covered period (the 8-week to 24-week period beginning on the date the covered loan is funded):
- Payroll costs
- Interest payments on mortgages
- Rent
- Utility payments
- Covered operations expenditures
- Covered property damage costs
- Covered supplier costs
- Covered worker protection expenditures
- Forgiveness amounts will be reduced for any employee cuts or reductions in wages. To substantiate their fixed expenses, borrowers will have to provide source documentation for payroll expenses, rent and mortgage payments, and utility expenses as well as proof of payment for those expenses to the lender that is servicing the loan. If the expenses are approved, the SBA will pay that portion of the debt and reduce the borrower’s loan principal. Forgiveness may not be provided for expenses that do not qualify under one of the above listed expense categories.
What are the terms of the loan?
- Fixed interest rate of 1%
- All loan payments deferred until 10 months following the covered period
- Loan term of 5 years
Is Commerce servicing PPP loans for new customers to the bank?
In an effort to prevent potential fraud and address other security concerns, our efforts are focused on servicing our customers who have established Commerce Bank business deposit accounts prior to the inception date of the Paycheck Protection Program. If you do not have a Commerce Bank business deposit account, we suggest that you reach out to the financial institution that currently holds that for you as we want you to have the most secure and efficient path to accessing funds through the Paycheck Protection Program. As always, please connect with your Commerce representative for any additional information.
What is a “community financial institution”?
Per the Economic Aid Act, a Community Financial Institution (CFI) is one of the four types of lenders. CFIs will be able to submit First Draw (first time) PPP loans starting January 11, 2021. Second draw (second time) loans starting January 13, 2021.
- Community Financial Development Institution (CDFI)
- Minority Depository Institution (MDI)
- Community Development Corporation (CDC)
- Microlender Intermediary
- "Community financial institutions," which includes the following four groups of entities:
- Community development financial institutions (CDFIs), defined under Section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. §4702);
- Minority depository institutions, as defined in Section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. §1463);
- Certified development companies (CDCs) under title V of the 23 Small Business Investment Act of 1958 (15 U.S.C. §695 et seq.); and
- Microloan intermediaries, as defined in Section 7(m)(11) of the Small Business Act (15 U.S.C. §636).
- "Small insured depository institutions," defined as having consolidated assets of less than $10 billion; and
- Credit unions with consolidated assets of less than $10 billion.
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