Paycheck Protection Program
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SBA Paycheck Protection Program
About the Paycheck Protection ProgramThe Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law on March 27, 2020 and introduced a new SBA loan program, called the Paycheck Protection 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.
Businesses that experienced a temporary loss of revenue due to COVID-19 were eligible for the program. The PPP was designed to help small businesses to keep their workers on the payroll and cover expenses such as benefits, mortgage, lease, and utilities over a 24-week period while facing the current economic uncertainty.
Resources to help with PPP.
Key points regarding loan eligibility, features and terms.Get details
SBA Business Size Standards
Review business size and industry NAICS code standards that qualify a business for SBA programs.Get details
SBA Disaster Loans
In addition to PPP, learn more about Disaster Assistance options directly through the SBA.Get details
Treasury Department FAQs
Frequently asked questions answered by the SBA and U.S. Department of Treasury.Get details
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. In order to streamline the loan forgiveness process, please verify your contact information. To prepare for loan forgiveness, please view our additional resources to help you through the application process.
This information is based on current available information and is subject to change, based on continued SBA guidance. Be sure to check this site regularly as we will provide updates as they become available.
Resources to help you with loan forgiveness.
PPP Loan Forgiveness Application
Get prepared for your PPP Loan Forgiveness application with Commerce Bank.Get details
PPP Loan Forgiveness EZ Form Application
Geared toward Commerce Bank’s PPP borrowers who have less complex situations, including businesses with only one employee and cases in which a reduction of employees or wages has not been a factor.Get details
Loan Forgiveness Application Instructions
View the SBA instructions on how to work through your loan forgiveness application.Get details
Loan Forgiveness EZ Form Application Instructions
If your business qualifies to use the EZ Form, view SBA instructions on how to work through this loan forgiveness application.Get details
Loan Forgiveness FAQs
The latest Small Business Administration (SBA) guidance on loan forgiveness.Get details about the Loan Forgiveness FAQs
Frequently Asked Questions
How do I know if my business is eligible?
- 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.
- 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.
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;
- 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 though another loan under Section 7(a).
- A lender must consider whether the borrower was operating on February 15, 2020 and had employees or independent contractors for whom the borrower paid.
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
- Interest on any other debt obligations incurred before the covered period
How does the loan work?
- SBA guarantee and ongoing servicing fees are waived.
- 100% loan guaranty
- Maximum loan amount of $10MM
- Loan amount determined by borrower’s total average monthly payroll costs (excluding independent contractors for non-independent contractor applicants) for the most recent 12 months (excluding compensation above $100,000/year employees), times 2.50, plus the outstanding amount of any SBA Economic Injury Disaster Loan (EIDL) between January 31, 2020 and the date that Payment Protection Program loans are available to reﬁnance the EIDL loans (alternative loan amount calculations available for seasonal employer or entities that were not in operation between February 15, 2019 and June 30, 2019).
- No collateral or personal guarantees are permitted to be required.
- No credit elsewhere test
What does ‘debt forgiveness’ mean?
- 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 period beginning on the date the covered loan is funded):
- Payroll costs
- Interest payments on mortgages
- Utility payments
- 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 purchase that portion of the debt from the bank 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.
Additional FAQs can help you prepare for applying for debt forgiveness on your PPP loan.
What are the terms of the loan?
- Fixed interest rate of 1%
- All loan payments deferred for a minimum of 6 months
- Maximum loan term of 2 years