Updated: January 11, 9:00 AM
Apply now with Northfield Savings Bank
On December 27, 2020, coronavirus relief legislation reinstated the Paycheck Protection Program (PPP). NSB is accepting applications for its customers and Vermont-based businesses located within NSB’s market area. NSB will begin submitting loan applications to the SBA when the application portal reopens to all PPP lenders. PPP funds are available on a first-come, first-served basis until funds are depleted or March 31, 2021, whichever comes first.
To get started, download the application and, if practical, work with a tax advisor to calculate your loan amount and gather required documentation. Once you have completed the application and gathered required documentation, click SUBMIT to begin a secure email method of submission. If you receive an error message, please click here for email instructions.
Please refer to the following FAQs for PPP details.
Frequently Asked Questions
NSB provides answers to some basic PPP questions below. The U.S. Treasury publishes detailed PPP rules and updates HERE.
WHAT DOCUMENTATION AND CERTIFICATION DOES PPP REQUIRE?
Applicants must submit the following documentation to NSB:
- First-Time Borrower Application
- Second Draw Borrower Application
- Certification of Beneficial Owner(s) Form – only applicable if borrower is a new customer of NSB
- Regulation B Form - only applicable if more than one borrower will be listed on the loan application
- Documentation to establish eligibility such as payroll processor records, payroll tax filings, Form 1099-MISC, or income and expenses from a sole proprietorship. Borrowers lacking such documentation must provide other supporting documentation, such as bank records, sufficient to demonstrate the qualifying payroll amount.
HOW DO I APPLY FOR LOAN FORGIVENESS?
Borrowers may submit a loan forgiveness application any time on or before the maturity date of the loan provided they have used all of the loan proceeds for which they are requesting forgiveness. A borrower’s covered period (the time during which they may utilize PPP funds) begins when the lender disburses funds and ends 8 to 24 weeks later. Borrowers who do not apply for forgiveness within 10 months of the end of their covered period will then begin to make payments on their loan balance. Because applications include sensitive information, submission via standard unsecured email is discouraged.
We encourage borrowers to utilize the full 8 to 24 week covered period available under PPP rules. NSB will provide its borrowers a secure method to submit forgiveness applications.
Borrowers of $150,000 or less should apply using the streamlined forgiveness application form, requiring minimal calculation and documentation. Borrowers of over $150,000 may be able to apply using a simplified “EZ” forgiveness application form. To determine if you can use the EZ form, refer to this brief questionnaire.
FORGIVENESS APPLICATION FORMS AND INSTRUCTIONS:
NOTE: As of 1/11/2021, the SBA has not yet released the new streamlined forgiveness application form for borrowers of $150,000 or less.
WHAT IS THE PAYCHECK PROTECTION PROGRAM?
The Paycheck Protection Program (PPP) is a small business loan relief program authorized by the CARES Act, funded and overseen by the U.S. Treasury Department (Treasury) and administered by the U.S. Small Business Administration (SBA). PPP provides small businesses forgivable loan funding to cover payroll costs and other critical expenses incurred during the COVID-19 national emergency. PPP was recently reopened to first-time borrowers and expanded to allow “Second Draw” loan disbursements to eligible existing borrowers.
WHEN ARE PPP LOANS AVAILABLE?
- NSB is accepting applications for its customers and Vermont-based businesses located within NSB’s market area.
- NSB will begin submitting loan applications to the SBA when the application portal reopens to all PPP lenders.
- PPP funds are available on a first-come, first-served basis until funds are depleted or March 31, 2021, whichever comes first.
CAN MY BUSINESS APPLY FOR A PPP LOAN THROUGH NORTHFIELD SAVINGS BANK?
NSB is accepting applications for its customers and Vermont-based businesses located within NSB’s market area. While NSB will strive to accommodate non-customer applicants, existing NSB customer applications will receive first priority.
WHO IS ELIGIBLE FOR PPP FUNDING?
Eligible first-time applicants are businesses with 500 or fewer employees including:
- Veterans organizations
- Tribal business concerns
- Sole proprietorships
- Self-employed individuals
- Independent contractors
- 501(c)6 entities
Certain businesses with more than 500 employees might also meet SBA eligibility requirements. SBA provides those details HERE.
Existing PPP borrowers may be eligible for Second Draw funding, provided they have 300 or fewer employees and can document a decrease of at least 25% in gross receipts from 2019 to 2020. Any PPP forgiveness amount already received is excluded from gross receipts calculation.
ARE PPP LOANS FORGIVABLE? WILL MY BUSINESS NEED TO PAY BACK THE LOAN PROCEEDS?
Any unforgiven portion of PPP proceeds is a loan with principal and interest that must be paid back.
PPP’s primary purpose is to provide support for small business payroll costs. No more than 40% of the forgiven amount may be for non-payroll costs.
PPP loan amounts will be forgiven provided:
- Loan proceeds are used to cover payroll costs and most mortgage interest, rent, and utility costs during the 8 to 24 week covered period after loan funds are disbursed; and
- Employees are retained and their compensation levels are maintained. Some exceptions are made for loan amounts under $150,000 and companies who attempt to rehire or replace laid-off employees but are unable to do so.
Loan proceeds used for non-approved purposes will not be forgiven.
WILL FORGIVENESS AMOUNTS BE REDUCED IF THE BORROWER IS UNABLE TO REHIRE OR REPLACE LAID-OFF EMPLOYEES?
No, borrowers with loans of less than $150,000 are exempt from reductions in the forgiveness amount based on reductions in full-time equivalent employees, salary, or wages. Borrowers of over $150,000 may not have their forgiveness amounts reduced if they can adequately document:
- An inability to rehire former employees and an inability to hire similarly qualified employees; or
- An inability to return to the same level of business activity due to compliance with federal COVID-19 requirements or guidance.
WHAT ARE THE TERMS FOR UNFORGIVEN PORTIONS OF PPP LOANS?
Any unforgiven portion of PPP proceeds is a loan with a fixed interest rate of 1% and full payment due in 5 years. Loan payments are deferred until the date any forgiven amount is paid by the SBA to NSB, but interest will continue to accrue over this period. There are no prepayment penalties or fees.
DO I NEED TO TRY TO GET OTHER FUNDING BEFORE I CAN APPLY FOR PPP?
No. Previously the SBA has required small businesses to try to obtain some or all of their loan funding from other sources. For PPP, this “Credit Elsewhere” requirement has been waived.
HOW MUCH CAN MY BUSINESS BORROW UNDER PPP?
Maximum PPP loan amount for first-time borrowers is average monthly payroll costs from the last year multiplied by 2.5. Total loan amount for first-time borrowers will not exceed $10 million. Seasonal or new businesses will use different methods to calculate payroll costs. An annualized compensation cap of $100,000 per employee factors into payroll cost calculation.
Maximum loan amount for Second Draw borrowers is average monthly payroll costs from the last year multiplied by 2.5. Second Draw borrowers in industries assigned to NAICS code 72 (Accommodation and Food Services) may receive loans of up to 3.5X average monthly payroll costs. Maximum amount for all Second Draw loans may not exceed $2 million.
HOW DOES A BUSINESS CALCULATE ITS MAXIMUM LOAN AMOUNT?
Treasury provides detailed guidance on how to calculate maximum PPP loan amounts for self-employed, partnerships, S corporations, C corporations, LLCs, and nonprofits.
The following methodology may be useful for many applicants.
Step 1: Aggregate 12 months of payroll costs from the year 2019 for employees whose principal place of residence is the United States.
Step 2: Subtract any compensation paid to an employee in excess of an annual salary of $100,000 and/or any amounts paid to an independent contractor or sole proprietor in excess of $100,000 per year.
Step 3: Calculate average monthly payroll costs (divide the amount from Step 2 by 12).
Step 4: Multiply the average monthly payroll costs from Step 3 by 2.5.
The examples below illustrate this methodology.
Example 1 – No employees make more than $100,000
Annual payroll: $120,000
Average monthly payroll: $10,000
Multiply by 2.5 = $25,000
Maximum loan amount is $25,000
Example 2 – Some employees make more than $100,000
Annual payroll: $1,500,000
Subtract compensation amounts in excess of an annual salary of
Average monthly qualifying payroll: $100,000
Multiply by 2.5 = $250,000
Maximum loan amount is $250,000
DOES A PPP LOAN REQUIRE FEES, COLLATERAL OR A PERSONAL GUARANTY?
No fees will be charged and no collateral is required. No personal guaranty is required, but the U.S. Government will pursue criminal charges against borrowers who use PPP proceeds for fraudulent purposes.
WILL THE SBA REVIEW INDIVIDUAL PPP LOANS?
Yes, the SBA will review all loans in excess of $2 million, in addition to other loans as appropriate, following the lender’s submission of the borrower’s loan forgiveness application.
Important Updates for NSB's PPP Borrowers
- January 11, 2021 | NSB Now Accepting PPP Loan Applications
- December 22, 2020 | PPP Expected to Reopen with Rule Changes
- December 4, 2020 | Beware of PPP Fraud
- December 3, 2020 | SBA Data Release and Unsolicited Communications
- November 13, 2020 | Unsolicited Communications for PPP Forgiveness-related Services
- October 28, 2020 | SBA EIDL Fraud Alert for PPP Borrowers
- October 9, 2020 | PPP Streamlined Forgiveness
- October 8, 2020 | PPP Forgiveness Follow-Up
- October 7, 2020 | PPP Forgiveness Update
- August 10, 2020 | PPP Forgiveness Update
- July 2, 2020 | New Changes in PPP Forgiveness Rules
- June 19, 2020 | New PPP Forgiveness Applications Released
- June 8, 2020 | New PPP Flexibility Rules Impacting Your Loan