Paycheck Protection Program Loan Forgiveness

As part of the CARES Act that was signed by President Trump on Friday, March 27, 2020, the Paycheck Protection Program (or PPP) provides funding for small businesses through federally backed loans and is administered by the SBA. This program will be open until June 30, 2020, or until program funds made available for this purpose are exhausted. Loans guaranteed under the Paycheck Protection Program (PPP) will be 100 percent guaranteed by SBA.

The CARES Act authorizes the SBA to temporarily guarantee loans under this new 7(a) loan program that will provide $349 billion in funding for eligible businesses to use towards:

• Employee salaries and wages, inclusive of related payroll costs
• Interest payments on mortgages entered into before February 15, 2020
• Rent obligations for a lease entered into before February 15, 2020
• Payment of utilities for which service began before February 15, 2020
• Interest on other debt obligations incurred before February 15, 2020
• Refinancing an SBA EIDL loan, used for payroll costs, made between January 31, 2020 and April 3, 2020 (If your EIDL loan was not used for payroll costs, it does not affect your eligibility for a PPP loan. If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan.)
  
  

I am a business owner. Am I eligible?

You are eligible for a PPP loan if you were operational on February 15, 2020 and have 500 or fewer employees whose principal place of residence is in the United States, or are a business that operates in a certain industry and meet the applicable SBA employee-based size standards for that industry. This includes tax-exempt nonprofit organizations, veteran’s organizations and Tribal business concerns.

You are also eligible if you are an individual who operates under a sole proprietorship or as an independent contractor or eligible self-employed individual and were operational on February 15, 2020.

Do I have to be an existing BankUnited client?

At this time, BankUnited is accepting PPP loan applications from existing business customers only. Please keep in mind that the program’s funding limitations may impact loan availability for those businesses applying later in the availability timeframe. If you are not already an existing BankUnited customer, we recommend you contact your financial institution for assistance or additional information.

How much can I borrow?

Based on funding availability, the maximum loan amount is the lesser of $10 million or an amount that you will calculate using the below payroll-based formula*.

Step 1: Calculate the aggregate payroll costs from the last twelve months 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.
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.
Step 5: Add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid).

*For seasonal firms, the lesser of $10 million or 2.5 times the average monthly payroll for the 12-week period starting either February 15^th, 2019 or March 1^st, 2019 (at the election of the borrower). For business without a full year of payroll history, the lesser of &10 million or 2.5 times the average monthly payroll from January 1^st, 2020 to February 29^th, 2020.

Can my loan payments under the program be deferred?

Payments on the loan are eligible for deferral for 6 months (including payment of principal, interest, and fees). Interest will continue to accrue on PPP loans during this six-month deferment.

Can my loan under this program be forgiven?

Yes. The amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest. That is, the borrower will not be responsible for any loan payment if the borrower uses all of the loan proceeds for forgivable purposes (over the eight-week period following the date of the loan) and employee and compensation levels are maintained. At least 75 percent of the loan forgiveness amount must be attributable to payroll costs.

How may I use the proceeds of the loan?

The proceeds of a PPP loan are to be used for:

• Payroll costs (At least 75% of the loan forgiveness amount must be attributable to payroll costs)

• Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums

• Payments of interest on mortgage obligations incurred before February 15, 2020 (but not mortgage prepayments or principal payments)

• Rent payments on leases dated before February 15, 2020

• Utility payments under service agreements dated before February 15, 2020

• Interest payments on any other debt obligations that were incurred before February 15, 2020

• Refinancing an SBA EIDL loan, used for payroll costs, made between January 31, 2020 and April 3, 2020 (If your EIDL loan was not used for payroll costs, it does not affect your eligibility for a PPP loan. If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan. Proceeds from any advance up to $10,000 on the EIDL loan will be deducted from the loan forgiveness amount on the PPP loan.)

Paycheck Protection Program Loan Forgiveness

As part of our ongoing commitment to helping small businesses recover, BankUnited wants to help you maximize your Paycheck Protection Program (PPP) loan forgiveness opportunity.

If you obtained a PPP loan from BankUnited, we will provide additional information regarding loan forgiveness via email.

Below is some basic information on PPP loan forgiveness based on the current guidance from the Small Business Administration (SBA) and Treasury Department. As the borrower, you are responsible for understanding the SBA's rules and if your loan qualifies for forgiveness.

Please check the SBA site and the Treasury site frequently as they are regularly updated.

Loan Forgiveness Application

We are currently working on making the loan forgiveness application available via our PPP online portal. In the meantime, PPP borrowers can download the PPP Loan Forgiveness Instructions and Application issued by the SBA and Treasury, to get a sense of what will be required to initiate your loan forgiveness request. BankUnited PPP borrowers will be receiving an email with instructions on how to initiate their loan forgiveness request. Please note that you cannot apply for forgiveness of your PPP loan until at least eight weeks after your original disbursement date; therefore, the timing of your access to the PPP portal will be determined by this date. 

Documents You Will Need to Apply for Forgiveness

Please view the PPP Loan Forgiveness Instructions and Application for detailed information on the documentation that will be required for submission with your forgiveness application. Based on this guidance, below are some examples of the documents that we expect will be required:

• Payroll reports from your payroll provider and any documentation that supports your use of PPP loan proceeds during the covered period
• Documentation evidencing the number of full time equivalent employees on your payroll during the times specified in the guidance linked above
• 2019 Payroll tax filings (Form 941)
• State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported or that will be reported to your state
• Documents verifying any retirement and health insurance contributions made by the employer during the covered period
• Documents verifying your eligible interest, rent, and utility payments during the covered period (e.g., canceled checks, payment receipts, account statements)

This information is based on currently available information and is subject to change. We will provide updates on our website as additional guidance becomes available. You may also visit the SBA site and Treasury site directly to stay informed.

We understand the critical role banks like us play in the success of your business and are here to support you and your business during this time. For more information, please contact your banker, lender, or local branch, who will be more than happy to address your specific questions.

We appreciate your understanding and know we can get through this together.

This is not a commitment to lend. All loans are subject to program requirements and availability of funds under the SBA PPP Program. Your application to participate in the Paycheck Protection Program is subject to SBA approval.