Apply now with Northfield Savings Bank
NSB is prepared to originate and service the Paycheck Protection Program. We will respond to all applications, with priority given to existing NSB relationships. To get started, we recommend customers download the application and, if possible, work with their tax advisors to calculate loan amounts 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.
NSB is following U.S. Treasury and Small Business Administration guidance in originating, processing, and disbursing PPP loans. That guidance requires banks to disburse funds to SBA-approved PPP borrowers no later than 10 calendar days from loan approval. Unless provided new guidance granting flexibility regarding date of disbursement, NSB will be disbursing approved funds in compliance with the 10-day rule.
Paycheck Protection Program FAQs
NSB provides answers to some basic PPP questions below. The U.S. Treasury publishes detailed PPP rules and updates HERE.
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. The first round of funding was $349 billion; it was fully subscribed by April 16. The second round of funding is $310 billion; it became available on April 27.
WHEN ARE PPP LOANS AVAILABLE?
- Second round funding is available as of April 27
- Funding on a first-come, first-served basis nationally until fully subscribed
CAN MY BUSINESS APPLY FOR A PPP LOAN THROUGH NORTHFIELD SAVINGS BANK?
Yes, Northfield Savings Bank is prepared to originate and service the Paycheck Protection Program. We will respond to all applications, with priority given to existing NSB relationships. Please follow the steps outlined at the top of this page to submit your application.
WHO IS ELIGIBLE FOR PPP FUNDING?
Eligible businesses with 500 or fewer employees can apply for a PPP loan. This includes:
- Veterans organizations
- Tribal business concerns
- Sole proprietorships
- Self-employed individuals
- Independent contractors
Certain businesses with more than 500 employees might also meet SBA eligibility requirements. SBA provides those details HERE.
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 25% 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 week period after loan funds are disbursed; and
- Employees are retained and their compensation levels are maintained.
Loan proceeds used for non-approved purposes will not be forgiven. Reductions in number of employees or their compensation during the coverage period can reduce or eliminate loan forgiveness. PPP borrowers have until June 30, 2020 to restore their full-time employment and salary levels for reductions made between February 15, 2020 and April 26, 2020.
For example, if loan funds are disbursed on April 13, 2020, borrower has 8 weeks, until June 8, 2020, in which to use the funds for approved purposes, and borrower has until June 30, 2020 to restore their full-time employment and salary levels if any reductions were made between February 15, 2020 and April 26, 2020. In this example, funds utilized after June 8, 2020 will not be eligible for forgiveness. Failure to restore any reductions in employment or salary levels made between February 15, 2020 and April 26, 2020 will also reduce or eliminate loan forgiveness.
After receiving a PPP loan and utilizing the proceeds, borrowers may then apply for loan forgiveness. Northfield Savings Bank will process PPP loan forgiveness applications in compliance with SBA and Treasury rules, which have not yet been released.
WILL FORGIVENESS AMOUNTS BE REDUCED IF THE BORROWER LAYS OFF AN EMPLOYEE, OFFERS TO REHIRE THE SAME EMPLOYEE, BUT THE EMPLOYEE DECLINES THE OFFER?
No, provided the borrower makes a good faith, written offer of rehire and documents the employee’s rejection of that offer. Employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.
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 2 years. Loan payments are deferred for 6 months, 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 is 2 months of average monthly payroll costs from the last year plus an additional 25% of that amount. Total loan amount 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.
HOW DOES A BUSINESS CALCULATE ITS MAXIMUM LOAN AMOUNT?
Treasury provides detailed guidance on how to calculate maximum PPP loan amounts for self-employed, farmers, S corporations, C corporations, LLCs, and nonprofits.
The following methodology may be useful for many applicants.
Step 1: Aggregate payroll costs from the last 12 months for employees whose principal place of residence is the United States. You may also aggregate 12 months of payroll costs from the year 2019.
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
WHAT DOCUMENTATION AND CERTIFICATION DOES PPP REQUIRE?
Applicants must submit the following documentation to NSB:
- Paycheck Protection Program 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.
The application requires borrowers to make the following good faith certifications:
- The Applicant was in operation on February 15, 2020 and had employees for whom it paid salaries and payroll taxes or paid independent contractors, as reported on Form(s) 1099-MISC.
- Current economic uncertainty makes the loan necessary to support your ongoing operations. (Any borrower that, together with its affiliates, received PPP loans of less than $2 million will be deemed by the SBA to have made this certification in good faith.)
- The funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments.
- You have not and will not receive another loan under this program.
- You will provide to the lender documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting this loan.
- Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities, and not more than 25% of the forgiven amount may be for non-payroll costs.
- All the information you provided in your application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program is punishable by law.
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.