Paycheck Protection Program

The Small Business Administration (SBA) has indicated that August 8, 2020 is the last date on which the SBA will approve a Paycheck Protection Program (PPP) loan application. In order to ensure the necessary time for submission and approval, we are no longer accepting new PPP loan applications effective August 6, 2020.

We encourage all Members and local businesses to investigate other available Financial Assistance Programs, including those available through Frontwave Credit Union as well as other local, state and national institutions and agencies.

Already have a Paycheck Protection Program loan with Frontwave?

Loans issued prior to June 5, 2020, have a maturity of 2 years. Loans issued after June 5, 2020, have a maturity of 5 years. In general, the loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (at least 60% of the forgiven amount must have been used for payroll). We are not yet accepting forgiveness applications as we await additional information from the Small Business Administration (SBA) to finalize our process. We will notify Members with next steps once our process is finalized. No payment will be due until forgiveness applications are fully reviewed.

Effective June 5, 2020, the SBA published new rules to give business owners greater flexibility:

More time to spend the money: Instead of 8 weeks, businesses now will have 24 weeks from the day they get their PPP funds to use them, but all funds must be used no later than December 31, 2020.

Less money must be dedicated to payroll: To qualify for full forgiveness of their loans, the amount a business is required to spend on payroll costs has been relaxed from 75% to 60% of total PPP loan proceeds. Businesses must allocate at least 60% of their PPP funds for payroll expenses and may use the rest to pay for overhead costs, such as rent, mortgage interest and utilities. If a business owner spends less than 60% on payroll, they may still qualify for partial forgiveness.

More time to rehire staff: To qualify for full forgiveness under the old rules, business owners had to maintain the average number of employees they had on staff as of February 15, 2020, and pay them at their same rate by June 30, 2020. The new rules extend the date to December 31, 2020, and also add two additional safe harbors. Full forgiveness may be available if:

  1. A business cannot hire back their full staff due to government mandated COVID-related workplace safety requirements that they operate at less-than-full capacity.
  2. A business is unable to hire back previous employees and unable to hire similarly qualified employees.

Delayed repayment: Instead of deferring payments for 6 months after receipt of loan proceeds, businesses are not required to make payments until the SBA makes a determination on the business’s forgiveness application.

While you have plenty of time to complete the forgiveness process, please continue to track and retain documentation for all expenses paid using PPP loan proceeds. The required items include verification of the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease, and utility obligations. Once the SBA has issued additional guidance, you will be notified of the next steps. For additional details, contact your Frontwave loan representative.

Helpful Links:

U.S. Small Business Administration

California Governor’s Office of Business and Economic Development