Apply here for SBA PPP Loan or Forgiveness

SBA Paycheck Protection Program (PPP)

The Economic Aid Act approved on December 27, 2020, included Paycheck Protection Program (PPP) Enhancements, which established three opportunities for business owners. As a SBA Preferred Lender, Central Minnesota is proud to provide access to this program for local businesses.

The Paycheck Protection Program's purpose remains the same: to preserve employment by providing capital to small businesses to meet ongoing short-term expenses, including payroll costs and other eligible expenses. The program's changes include additional eligible entities, additional qualified expenses, and the maximum loan amount calculations. With the program's changes, you may now be eligible for your first PPP loan, an increase to your existing PPP loan, or a second PPP loan.

PPP 2nd Draw Loans

(January - May 2021)

For previous PPP recipients looking to draw funds again on their current loan.

PPP 1st Draw Loans

(January - May 2021)

For business owners who are interested in applying for their first PPP loan.

PPP Loan Increase

(January - May 2021)

For business owners with existing PPP loans which have not yet been forgiven.

PPP Forgiveness

(1st or 2nd Draw Loans)

For PPP 1st or 2nd draw loan recipients, learn about and apply for loan forgiveness.


SBA PPP loans are serviced through Central Minnesota Credit Union

This means that all correspondence will be through Central Minnesota Credit Union, NOT SBA. Please be on alert for phishing attempts by fraudsters. There have been reports of applicants receiving fake correspondence from the SBA. If you have any questions regarding communications about your accounts, please contact CMCU directly.

 

PPP Second Draw Loans

January - May 2021

The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan. You can obtain a second PPP loan if you received and expended your first PPP loan.

To receive a Second Draw PPP Loan, applicants must demonstrate either a 25% annual revenue reduction in 2020 compared to 2019 or in any calendar quarter in 2020 compared to 2019.

Targeted Eligibility

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

  • Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
  • Has no more than 300 employees; and
  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

Who Can Apply for PPP Second-Draw Loans:

  • Business entities (e.g., partnerships, corporations, LLCs)
  • Sole proprietors, independent contractors, self-employed individuals
  • 501(c)(3)
  • 501(c)(6)
  • 501(c)(19) Veterans organization
  • Tribal business, and
  • Housing cooperatives, destination marketing organizations, and eligible news organizations.

Must comply with size standards, eligibility criteria, and certain limitations.

Full Forgiveness Terms

Second Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:

  • Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan;
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • At least 60 percent of the proceeds are spent on payroll costs.

Maximum Loan Amount

For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million.

Increased Assistance for Accommodation and Food Services Businesses

For borrowers in the Accommodation and Food Services sector, the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.

Apply Online for Second Draw PPP Loans

WAIT! Before applying, do you meet the "Targeted Eligibility" for a Second Draw PPP Loan?
(See more information under "Targeted Eligibility")

APPLY ONLINE
If you have questions, call our dedicated business team phone line: (833) 267-7321

First Draw PPP Loans

January - May 2021

Eligible applicants that did not receive a PPP loan prior to August 8, 2020, will now have the ability to apply for a PPP First Draw Loan on or before May 31, 2021.

  • Eligibility for PPP loans has been revised to include additional eligible types of entities.
  • Covered eligible expenses have also been expanded and now includes the following: payroll costs, rent, mortgage interest, utilities, operations expenditures, property damage costs, supplier costs, and worker protection expenditures.
  • Certain borrowers may request an increase to their original PPP loan amount.

Who Can Apply for PPP First-Draw Loans:

  • Business entities (e.g., partnerships, corporations, LLCs)
  • Sole proprietors, independent contractors, self-employed individuals
  • 501(c)(3)
  • 501(c)(6)
  • 501(c)(19) Veterans organization
  • Tribal business, and
  • Housing cooperatives, destination marketing organizations, and eligible news organizations.

Must comply with size standards, eligibility criteria, and certain limitations.

 

Apply Online for First-Draw PPP Loan

If you have questions, call our dedicated business team phone line: (833) 267-7321

First Draw PPP Loan Increases

(Available January 25, 2021)

Certain existing PPP borrowers may be eligible to request an increase to their original PPP loan amount.  Further guidance will be forthcoming from SBA on the eligibility and process.

PPP Borrowing Entities Eligible for Loan Increases

The following borrowers can reapply or request an increase in their PPP loan amount:

  • If a borrower returned all of a PPP loan, the borrower may reapply for a PPP loan in an amount the borrower is eligible for under current PPP rules.
  • If a borrower returned part of a PPP loan, the borrower may reapply for an amount equal to the difference between the amount retained and the amount previously approved.
  • If a borrower did not accept the full amount of a PPP loan for which it was approved, the borrower may request an increase in the amount of the PPP loan up to the amount previously approved.
  • SBA has modified calculation methods that are used to determine the maximum loan amount for certain entity types.*
  • Partnerships: If a partnership received a PPP loan that only included amounts necessary for payroll costs of the partnership’s employees andother eligible operating expenses, but did not include any amount for partner compensation this can now be added.
  • Seasonal Businesses: The maximum loan amount is the employer’s average total monthly payments for payroll for any 12-week period selected bythe seasonal employer beginning February 15, 2019, and ending February 15, 2020.
  • Farmers – Schedule F: Operates as a sole proprietorship, an independent contractor, or is an eligible self-employed individual. Calculation is now based on IRS Form 1040 Schedule F line 9 Gross Income instead of Net Income.

*Note: If your PPP loan has already been partially or fully forgiven by SBA, an increase in not available.

Apply for PPP Loan Increase



To apply for an increase, please contact your Commercial Banking Officer or call our dedicated business team phone line:

(833) 267-7321

PPP Forgiveness

First Draw PPP Loans or Second Draw PPP Loans

We at Central MN Credit Union understand loan forgiveness for your recent Paycheck Protection Program (PPP) loan is important to your business.

If your loan is less than $150,000 and you would like to use a simple application for forgiveness, select “Yes” on the screen that asks if you would like to use the 3508S Application for Forgiveness.

If this application is selected, you do not need to provide CMCU any documentation as you certify that what is provided is true and correct. SBA reserves the right to audit your application at any point in time.  If that happens, you will need to provide the supporting documentation to SBA. For loans of $150,000 and under, the borrower must retain records relevant to the forgiveness application submitted that prove compliance for employment records and other expenses for up to 4 years after submitting the application.

Apply for Forgiveness or Upload Documentation

If you have questions, call our dedicated business team phone line: (833) 267-7321

Forgiveness Application: Documentation Required

Sole Proprietorships with No Employees

  • 2019 Schedule C or F
  • Bank Statement from February of 2020

NOTE: Separate payments for health insurance, retirement, or state or local taxes are NOT eligible for additional loan forgiveness.

(If any other eligible expenses are being used to attain 100% forgiveness)

  • Business mortgage interest payments
    • Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period;
      OR
    • Lender account statements from February 2020 and the months of the Covered Period through the month after the end of the Covered Period verifying interest amounts and eligible payments.
  • Business rent or lease payments
    • Copy of current lease agreements and receipts or canceled checks verifying eligible payments from the Covered Period;
      OR
    • Lessor account statements from February 2020 and from the Covered Period through the one month after the Covered Period verifying eligible payments.
  • Business utility payments
    • Copy of invoices from February 2020 and those paid during the Covered Period and receipts of cancelled checks or account statements verifying those eligible payments.

 

Entities & Sole Proprietorships With Employees

  • Payroll report prepared by 3rd party
  • Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the borrower included in the forgiveness amount (PPP Schedule A, lines (6) and (7)).
  • Tax forms – quarterly 941 report + State unemployment tax filing (filed or will be reported)

OR

  • Internally prepared payroll information
  • Bank statements for the reporting period documenting the amount of cash compensation paid to employees with expenses clearly notated on statements (Highlighted).
  • Schedule C or F (if a sole prop and have employees)
  • Tax forms – quarterly 941 report + State unemployment tax filing (filed or will be reported)
  • Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the borrower included in the forgiveness amount (PPP Schedule A, lines (6) and (7)).


(if any other eligible expenses are being used to attain 100% forgiveness)

  • Business mortgage interest payments:
    • Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period
      OR
    • Lender account statements from February 2020 and the months of the Covered Period through the month after the end of the Covered Period verifying interest amounts and eligible payments.
  • Business rent or lease payments:
    • Copy of current lease agreements and receipts or canceled checks verifying eligible payments from the Covered Period;
      OR
    • Lessor account statements from February 2020 and from the Covered Period through the one month after the Covered Period verifying eligible payments.
  • Business utility payments:
    • Copy of invoices from February 2020 and those paid during the Covered Period and receipts of cancelled checks or account statements verifying those eligible payments.

 


While CMCU may have some of these documents on file, the SBA requires you, as the borrower, to supply the documents to validate your expenses.

Notes on payroll documents:

Payroll Reports should include all periods overlapping the 24-week covered period (or 8-weeks if selected), and show figures for each of the following eligible costs:

  • Cash compensation;
  • Employer contributions for employee health insurance;
  • Employer contributions to employee retirement plans; and 
  • Employer state and local taxes assessed on employee compensation.

It is preferred if the report shows separate cash compensation figures for: 

  • Employees who received compensation at an annualized rate <=$100,000 for all pay periods in 2019; and 
  • Employees who received compensation at an annualized rate >$100,000 for all pay periods in 2019
    [For Form 3508EZ, there is no need to separate employees by 2019 compensation level.]

This detail helps Central MN Credit Union validate the line item figures shown on the forgiveness application forms.  

Cash Compensation:

  • Eligible cash compensation includes: gross salary, gross wages, gross tips, gross commissions, paid leave (vacation, family, medical or sick leave), and allowances for dismissal or separation.  This may include bonus; hazard pay; and salaries to furloughed employees.
  • Do not include compensation in excess of an annual salary of $100,000 annualized, as prorated for the covered period.  Therefore, the payroll schedule should show no employee with more than $46,154 in compensation if selecting the 24-week period (or $15,385 for the 8-week period, if eligible and selected).
  • Do not include payments to independent contractors, or compensation to employees whose principal place of residence is outside the US; or qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act.

Employer-paid state and local taxes assessed on employee compensation:

  • Payroll reports should also show total amount paid by the borrower for employer state and local taxes assessed on employee compensation (e.g., SUI - state unemployment insurance tax).

Note on full-time equivalency (FTE):

FTE counts both full-time (FT) and part-time (PT) employees. An FT employee is counted as 1.0 FTE, and a PT employee is counted by average number of hours per week divided by 40. For example, a PT employee working 32 hours would count as 0.8 FTE. SBA also offers a simplified method that assigns all PT employees as 0.5, if that is preferable.

PPP Frequently Asked Questions

PPP Loan proceeds can be used for the following:

  • Payroll costs including benefits
  • Mortgage interest payments
  • Rent payments
  • Utility payments
  • Interest payments on any other debt obligations that were incurred before February 15, 2020
  • Refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020
  • Covered operations expenditures: payments for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses
  • Covered property damage costs: costs related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation
  • Covered supplier costs: expenditures made by a borrower to a supplier of goods for the supply of goods that—
    • are essential to the operations of the borrower at the time at which the expenditure is made; and
    • is made pursuant to a contract, order, or purchase order—(i) in effect at any time before the covered period with respect to the applicable covered loan; or (ii) with respect to perishable goods, in effect before or at any time during the covered period with respect to the applicable covered loan
  • Covered worker protection expenditures:
    • operating or a capital expenditures to facilitate the adaptation of the business activities of an entity to comply with requirements established or guidance issued by the Department of Health and Human Services, the Centers for Disease Control, or the Occupational Safety and Health Administration, or any equivalent requirements established or guidance issued by a State or local government, during the period beginning on March 1, 2020 and ending the date on which the national emergency with respect to the COVID–19 expires related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID–19
    • such expenditures may include—
      • the purchase, maintenance, or renovation of assets that create or expand—
        • a drive-through window facility
        • an indoor, outdoor, or combined air or air pressure ventilation or filtration system
        • a physical barrier such as a sneeze guard
        • an expansion of additional indoor, outdoor, or combined business space
        • an onsite or offsite health screening capability
        • other assets relating to the compliance with the requirements or guidance described in subparagraph (A), as determined by the Administrator in consultation with the Secretary of Health and Human Services and the Secretary of Labor
      • the purchase of—
        • covered materials described in section 328.103(a) of title 44, Code of Federal Regulations, or any successor regulation;
        • particulate filtering face piece respirators approved by the National Institute for Occupational Safety and Health, including those approved only for emergency use authorization; or
        • other kinds of personal protective equipment, as determined by the Administrator in consultation with the Secretary of Health and Human Services and the Secretary of Labor; and (C) such expenditures do not include residential real property or intangible property).

Payroll costs include:

  • Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
  • Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
  • State and local taxes assessed on compensation; and
  • For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.

You will owe money when your loan is due if you use loan proceeds for anything other than payroll costs, mortgage interest, rent, and utilities payments within the first 24 weeks after getting the loan. 60% of the loan proceeds are to be used for eligible payroll costs and up to 40% for eligible non-payroll costs.

  • Your loan forgiveness may be reduced if you decrease your full-time employee headcount and if you decrease salaries and wages.
  • You have until December 31, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.

You can submit a request to the lender that is servicing the loan. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. The lender must make a decision on the forgiveness within 60 days.

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