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COVID-19 Update: Getting Started with the Paycheck Protection Program

COVID-19 Update: Getting Started with the Paycheck Protection Program


Report: PPP funds depleted 

Update May 4, 2021: (From The American Bankers Association) The Small Business Administration has just informed trade associations that Paycheck Protection Program funding has been exhausted and that the PPP application portal will today stop accepting applications for loans from most lenders.

‌SBA said that it has reserved approximately $6 billion in funding for previously submitted loan applications subject to hold codes that have yet to be resolved. There is also approximately $8 billion remaining in congressionally mandated funding for PPP loans made by designated “community financial institutions,” defined for bankers’ purposes as minority depository institutions and community development financial institutions.

Meanwhile, First Security bank this week submitted its 1,000th PPP loan on behalf of local small business:

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Update March 31, 2021: (From the American Bankers' Association) President Biden signed into law H.R. 1799, a bill extending the Small Business Administration's Paycheck Protection Program. The PPP Extension Act allows loan applications to the program - which had been set to expire March 31 - for two more months and gives the SBA 30 additional days to process loan applications made by the new May 31 deadline.

Update January 15, 2021: The newest round of Paycheck Protection Program loans are now being accepted, and First Security is ready to help local small businesses secure these vital funds. Several changes have been made to the program, including a simplified process for having loans forgiven. Contact a First Security commercial lender now to begin.

The following statement from the Small Business Administration offers further detail on the new round of PPP funding:

First Draw PPP Loans are for those borrowers who have not received a PPP loan before August 8, 2020. The first round of the PPP, which ran from March to August 2020, was a historic success helping 5.2 million small businesses keep 51 million American workers employed.

Second Draw PPP Loans are for eligible small businesses with 300 employees or less, that previously received a First Draw PPP Loan and will use or have used the full amount only for authorized uses, and that can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. The maximum amount of a Second Draw PPP loan is $2 million.

Updated PPP Lender forms, guidance, and resources are available at and

Update January 8, 2021: The Small Business Administration has announced details of new Paycheck Protection Program loans.

The new iteration of the U.S. Small Business Administration's Paycheck Protection Program, enacted in late December 2020 as part of economic stimulus legislation, offers first and second loans to small businesses. It also creates a one-page application for loans of $150,000 or less.

First enacted in March 2020, the PPP originally offered forgivable loans of up to $10 million with 500 employees or less. Under the new version, the maximum loan amount is $2 million, and the employee limit is 300 or less. Businesses seeking a second loan must show a 25% year-over-year revenue drop from any quarter in 2019.

The SBA also announced this week that community financial institutions would be able to submit PPP applications for at least two days before other lenders. The dedicated window for community financial institutions is part of SBA’s efforts to ensure businesses that most need PPP funds can get them.

Source: Iowa Bankers Association

Update December 28, 2020: President Donald Trump signed a bill on December 27th that includes $900 billion in stimulus money and funding for several COVID-19 relief programs. We will share updates as we learn more about the second round of stimulus checks and the renewal of the Paycheck Protection Program.

Update July 24, 2020: The Small Business Administration recently announced that banks can submitting their loan forgiveness decisions beginning August 10th. First Security lenders will be in touch with PPP borrowers as the opening date approaches.

Update July 6, 2020: President Trump over the weekend signed into law the extension for the Small Business Administration's Paycheck Protection Program, allowing the program to continue until August 8. The new law also decouples PPP authorization from the SBA’s 7(a) lending program, allowing regular 7(a) lending to continue once the PPP has reached its authorization cap.

Update July 1, 2020: The application deadline for the Paycheck Protection Program has passed, though there is discussion in Washington about extending it. This description comes from the American Bankers Association:

The Senate late last night approved by unanimous consent legislation extending authorization for the Small Business Administration’s Paycheck Protection Program through August 8, 2020. The extension, which was authored by Senate Minority Leader Chuck Schumer (D-N.Y.), along with Sens. Ben Cardin (D-Md.), Jeanne Shaheen (D-N.H.), and Chris Coons (D-Del.), would also decouple PPP authorization from the 7(a) program, eliminating the risk that the regular SBA 7(a) lending program could shut down when the PPP hits its authorization cap. The House, which is scheduled to adjourn today, has not indicated whether it will bring up the measure under unanimous consent.

These are the numbers at First Security Bank & Trust after the current round of applications closed:

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Update June 23, 2020: There is one week left to apply for PPP funding. An estimated $128 billion remains available in the second round. 

Update June 9, 2020: On June 5, President Donald Trump signed legislation to address restrictions on the Small Business Administration's (SBA) Paycheck Protection Program (PPP).

While further guidance and clarification from the SBA and Treasury is likely, here is a summary of the provisions that appear in the Paycheck Protection Program Flexibility Act.

Specifically, the law:

  • Extends the covered period during which the loan may be used for forgivable expenses from eight weeks following disbursement of the loan to 24 weeks from loan disbursement or Dec. 31, 2020, whichever is earlier. Borrowers who received loans before June 5 may elect to continue using the eight-week covered period.
  • Lowers the amount that must be spent on payroll costs from 75 percent to 60 percent. The new 60 percent threshold is now a cliff, meaning that borrowers must spend at least 60 percent on payroll or none of the loan will be forgiven.
  • Extends the period in which employers may rehire or eliminate a reduction in employment, salary, or wages that would otherwise reduce the forgivable amount of a PPP loan to Dec. 31, 2020. However, the forgivable amount will be determined without regard to a reduction in the number of employees (compared to Feb. 15, 2020) if the recipient is (1) unable to rehire former employees and is unable to hire similarly qualified employees by Dec. 31, or (2) unable by Dec. 31 to return to the same level of business activity that existed before Feb. 15, 2020, due to compliance with federal requirements or guidance related to COVID-19.
  • Replaces the six-month deferral of payments due under PPP loans with deferral until the date SBA pays the lender the amount of loan forgiveness. If a borrower fails to apply for loan forgiveness within 10 months after the last day of the covered period for forgiveness, the borrower must begin to make payments of principal, interest, and fees on its PPP loan.
  • Establishes a minimum maturity of five years for new PPP loans as opposed to the current two-year maturity date. The five-year maturity takes effect on the date of enactment and will apply to any PPP loan made on or after June 5. Lenders and borrowers, however, may mutually agree to modify the maturity terms of prior-disbursed PPP loans.
  • Eliminates a provision that makes PPP loan recipients who have PPP debt forgiven ineligible to defer payroll tax payments.
  • The final date to obtain a PPP loan remains June 30, 2020.
  • This law will likely be subject to additional guidance by SBA and Treasury. Small-business borrowers should have a firm understanding of the provisions above and any related guidance to ensure they meet the criteria for loan forgiveness.

Update May 23, 2020: The Small Business Administration has approved $511.2 billion as of May 23 in Paycheck Protection Program loans, leaving $150 billion remaining. In Iowa, 54,380 loans totaling more than $5 billion have been approved by the SBA. Please contact us now to set up an appointment with an experienced PPP lender. 

Update April 22, 2020: The US Senate has approved an additional $310 billion in funding for the Paycheck Protection Program. First Security is anticipating final approval of additional funding soon. We are now working with local businesses to get applications ready to file quickly in the event more funding is approved. 

Update April 16, 2020: The $349 billion fund authorized for Paycheck Protection Program loans has been exhausted according to the Small Business Administration. The SBA is no longer accepting applications for PPP loans. Loan applications received by banks but not yet submitted to SBA will not be able to be completed. First Security will continue to work with local businesses on these loans and prepare them for submission to the SBA in the event more funds are approved.

While there are many new initiatives being unveiled as part of the government response to the COVID-19 pandemic, one of the provisions causing the most questions among business owners is the Paycheck Protection Program. This $349 billion initiative was approved as part of the nearly $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act and is administered by the Small Business Administration. Banks are taking the applications from borrowers and distributing funds, so if you’re interested in applying, your first move should be to contact a Commercial Lender at First Security Bank & Trust. We’ve created an appointment request form on our Contact Us page.

What is the Paycheck Protection Program?

The PPP is designed to give emergency financial assistance to small businesses to help the business and its employees make it through the pandemic crisis. Business owners should apply for loans through local banks, and are encouraged to use the funds on payroll and certain overhead costs. Up to 100% of the loan amount is forgivable if the small business uses the funds on mortgage interest, rent, utilities, and at least 75% on payroll costs. There are also several requirements regarding maintaining numbers of employees and their salary levels that need to be met to qualify for loan forgiveness.

How much can I receive?

Eligible borrowers can receive loans up to 2.5x their average monthly payroll expenses for the prior year. PPP loans are for a term of two years at 1.0%. Payments are deferred for the first six months of the loan.

How long do I have to apply?

Applications for PPP opened on April 3, 2020. Applications will be accepted until June 30, 2020, or until the program runs out of funds.

Do I have to have employees to qualify?

Self-employed persons, independent contractors, sole proprietorships, 501(c)3 nonprofit organizations, 501(c)19 veterans’ organizations, and tribal businesses with less than 500 employees are all considered small businesses as part of this program.

How do I apply?

Contact a Commercial Lender at First Security Bank & Trust by calling 1-800-272-0159. You can also submit an appointment request our Contact Us page. We’ll reach out to you as soon as possible.

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