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For important information about Economic Impact Payments (EIP) or the Paycheck Protection Program (PPP), and our COVID-19 response, click Learn More.

SBA Paycheck Protection Program (PPP) Loans

American Riviera Bank is not accepting new applications for PPP.

Please see below for answers to common questions or contact our Customer Service Center at info@americanrivierabank.com or 805-965-5942.

This information is not intended to be legal or professional advice, and we encourage you to seek guidance from your advisers as necessary to determine the option(s) that best meet your individual needs. We will continue to update this PPP page as we receive new information.

 

FREQUENTLY ASKED QUESTIONS

What if I make an offer to a former employee to return to work from lay-off or furlough and they decline?

As an exercise of the Administrator’s and the Secretary’s authority under Section 1106(d)(6) of the CARES Act to prescribe regulations granting de minimis exemptions from the Act’s limits on loan forgiveness, SBA and Treasury intend to issue an interim final rule excluding laid-off employees whom the borrower offered to rehire (for the same salary/wages and same number of hours) from the CARES Act’s loan forgiveness reduction calculation. The interim final rule will specify that, to qualify for this exception, the borrower must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower. Employees and employers should be aware that employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.*

*From the Department of Treasury's "Paycheck Protection Program Loans Frequently Asked Questions."
 

Are there still funds available?

As of now, the second appropriation of PPP funds is still available.  We also encourage small businesses, non-profits, sole proprietors, self-employed individuals and independent contractors still looking for funding sources to explore the following programs for alternative options:

  • The State of California has released a Small Business Disaster Loan Fund Guarantee Program. This program, backed by IBANK, is intended to provide loans to businesses impacted by COVID-19. Please note, IBANK is not a direct lender which means that businesses seeking capital will need to find lenders that are participating in this program. While this can be a viable option for some businesses, we do not yet have a current list of participating lenders.  We will be researching this and report back on any information we may find in the next few days.  See more here.
  • Economic Development Collaborative (EDC) Disaster Loan Fund.  See here.  
  • WEV's Quick Response Loan.  See here.
 

What do I need to know about eligibility before I apply?

Here is a link to the U.S. Treasury Paycheck Protection Program Guidance (the "Guidance") for your reference.  According to the Guidance, this program is for small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19.  

It is necessary to aggregate the number of employees from the Business Applicant and all Affiliates as defined in the SBA Small Business Compliance Guide in determining a business is eligible under the size requirements.  Generally speaking, affiliates are where one entity controls or has the power to control the other, or a third party (or parties) controls or has the power to control both.

Refer to the SBA’s site for details on businesses that are ineligible for the SBA 7(a) program.  For example, the following business are ineligible for this program and cannot apply:

  • Business engaged in Lending
  • Passive Business (including commercial or residential landlords)
  • Life Insurance companies (Agent may be OK)
  • Businesses outside the US or owned by non-USS Citizens or undocumented aliens.
  • Business engaged in Gambling
  • Business engaged in Illegal Activity (Ex: Marijuana)
  • Business which Restrict Patronage (Private Club)
  • Business providing prurient sexual material
  • Businesses primarily engaged in Lobbying activity
  • Speculative Businesses

Note that there may be other causes for ineligibility.  An American Riviera Bank team member will be reviewing each initially submitted application to review for eligibility under all criteria.

 

What do I need to know as an owner?

Unlike other SBA 7(a) loans, these require no personal guarantee! However, each 20% or more owner will be asked to provide certain information for anyone with at least 20% ownership of an Applicant Business. All parties listed below are considered owners of the Applicant Business as defined in 13 CFR § 120.10, as well as “principals.”

  • For a sole proprietorship, the sole proprietor;
  • For a partnership, all general partners, and all limited partners owning 20% or more of the equity of the firm;
  • For a corporation, all owners of 20% or more of the corporation;
  • For limited liability companies, all members owning 20% or more of the company; and
  • Any Trustor (if the Applicant is owned by a trust).

Each of these owners will be asked to electronically sign a certification regarding the eligibility of the business, and will have to certify that they have not had formal criminal charges brought against them.  Please refer to the sample certification under the Application section of this FAQ.

 

Applying for a PPP Loan

The Application Process

Our online workflow allows you to certify:

  • your eligibility for the PPP loan;
  • your loan amount; and
  • your acknowledgment of the criteria for loan forgiveness.

You will also be asked to upload documentation to enable us to complete our verification process.  This must be completed before we can deliver your application to the SBA.  Our ability to submit your application to the SBA is entirely dependent on receiving a complete application.

What You Need to Apply

  • Carefully consider the certification included in the SBA’s application to determine if you meet the eligibility requirements before you sign the document.
  • In addition to the online application, please be prepared to upload the following documents:  
    • Payroll expense verification in the form of an IRS Form 940 and 941. Pleases combine into a single file for uploading.
    • Payroll summary showing salaries by employee for all of 2019.
    • Detailed payroll reports for 2019 broken down that include all line item categories – remember, you will need to back out deductions when determining your loan amount.
    • If your business is seasonal, payroll records as described above for the time period covering February 15, 2019 – June 30, 2019.
    • 1099s (if you are self-employed or an independent contractor).

Here is a table to assist you in gathering the details to determine your loan amount – our online application will automatically calculate based upon what you input:

 

Troubleshooting the Application

 

Why is my Application Showing Incomplete?

Personal Information Screen

There are some common errors to consider if the Personal Information Screen looks incomplete:

  • Each owner needs to finalize their form and ensure “permanent resident alien” box is checked yes or no on the personal forms.

  • Confirm each other has checked “no” under “Neither US Citizen.”

SBA Eligibility Form 2483 Principal Information

This certification must be complete.Click on “Fill Out Form” and ensure you have answered appropriately for each principal owner with 20% or more ownership in the Business Applicant.

Contact Information Screen

If you cannot proceed to upload documents, confirm that you have clicked to accept terms.

Business Information Screen looks incomplete
  • Ensure you have followed the instructions for adding beneficial owners, using the “+” sign
  • You must answer “yes” to the question under SBA Eligibility in order for the SBA Eligibility Form 2483  to generate.  If you have already submitted your application without completing that step, respond back to this email with “UNLOCK ME” in the subject line
  • This certification must be complete.  Click on “Fill Out Form” and ensure you have answered appropriately for each principal owner with 20% or more ownership in the Business Applicant.

What If I have problems uploading documents?

  • Check the size of your file. Maximum File Upload Size: 60 MB
  • Try switching browsers.
  • Make sure you are using an up-to-date version of one of the following:
    • Google Chrome
    • Mozilla Firefox
    • Microsoft Edge
    • Safari for Mac or iOS
  • Restart your computer (Occasionally one-time issues may prevent uploads from functioning correctly and a restart may solve these problems).

 

Is the PPP Loan Forgiveness Application available?

The Small Business Administration (SBA), in consultation with the Department of the Treasury, released the Paycheck Protection Program Loan Forgiveness Application on Friday, May 15, 2020, but despite detailed instructions that accompany the 11-page application, many questions still remain.  In addition, the application instructions include new guidance not covered by prior FAQs issued by the SBA or other Interim Final Rules implementing the PPP provisions of the CARES Act. In addition, in the press release announcing the form, they indicate that the “SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities”.

When can I apply to have my PPP Loan forgiven?

The forgiveness application covers expenses during an 8-week period following the funding of your PPP loan.  We do not recommend completing the application until additional guidance has been issued as there remain several open questions.  Additionally, the SBA will require copies of 941’s as part of your request, which may not yet be available. At American Riviera Bank, we are working to configure an online, secure portal for requesting forgiveness and will not be accepting paper applications. As with the initial PPP application, the online portal will include calculation tools to assist you in determining forgiveness amounts and determining the necessary supporting documentation.  We recommend you continue to collect supporting documentation to support your use of the loan proceeds for your best chance at full loan forgiveness. 

When will I know what portion of my PPP Loan is forgivable?

Once a request for forgiveness is received, lenders have 60 days to make a determination on loan forgiveness under the PPP.

When does the 8-week period begin for tracking expenses eligible for loan forgiveness?

Prior guidance by the SBA indicated that the “covered period” for forgiveness was the 8-week period following disbursement of your PPP loan; however, the PPP Loan Forgiveness Application issued on May 15, 2020 includes instructions that provide options for borrowers to calculate payroll costs using an “alternative payroll covered period that aligns with borrowers’ regular payroll cycles”.

According to the application instructions, for “administrative convenience”, Borrowers with a biweekly (or more frequent) payroll schedule may elect to calculate eligible payroll costs using the eight-week (56-day) period that begins on the first day of their first pay period following their PPP Loan Disbursement Date (the “Alternative Payroll Covered Period”).

For example:

Borrower received its PPP loan proceeds on Monday, April 20, and the first day of its first pay period following its PPP loan disbursement is Sunday, April 26

The first day of the Alternative Payroll Covered Period is April 26 and the last day of the Alternative Payroll Covered Period is Saturday, June 20.

BUT, Borrowers must apply the Covered Period (not the Alternative Payroll Covered Period) wherever there is a reference in this application to “the Covered Period” only, such as when calculating business mortgage interest payments, utility payments, and other nonpayroll expenses.

What documentation should I maintain to evidence payroll expense?

The application indicates that documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or the Alternative Payroll Covered Period consists of each of the following:

  1. Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.
  2. Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period:
    • Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
    • State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.
  3. 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) of the application).

A review of the application appears to indicate that payroll costs “incurred but not paid during the Borrower’s last pay period of the Covered Period” can be included if paid “on or before the next regular payroll date”. Please note that we are still waiting on guidance to further explain this provision on the application; however, we would need to wait for final proof of payment before submitting your forgiveness application to the SBA.

 

What documents will be required to evidence my employee count before the pandemic?

Documentation showing (at the election of the Borrower) should include:

  1. the average number of FTE employees on payroll per month employed by the Borrower between February 15, 2019 and June 30, 2019;
  2. the average number of FTE employees on payroll per month employed by the Borrower between January 1, 2020 and February 29, 2020; or
  3. in the case of a seasonal employer, the average number of FTE employees on payroll per month employed by the Borrower between February 15, 2019 and June 30, 2019; between January 1, 2020 and February 29, 2020; or any consecutive twelve-week period between May 1, 2019 and September 15, 2019.

The selected time period must be the same time period selected for purposes of completing PPP Schedule A, line 11. Please see the SBA application for a copy of Schedule A.  Documents may include payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941) and state quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.

 

What documents will be required to prove nonpayroll, eligible expenses?

According to the application, documentation verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period includes:

  1. 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 one month after the end of the Covered Period verifying interest amounts and eligible payments.
  2. Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.
  3. Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.

Again, the application appears to indicate that an eligible nonpayroll cost is one paid during the Covered Period “or incurred during the Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period”.  Further guidance is needed from the SBA.  In addition, as with payroll, we would have to wait for proof of payment prior to submitting your forgiveness application to the SBA.

 

How much of my loan will be forgiven?

The application instructions indicate that the forgiveness amount will be the smaller of the following calculations:

  • “Modified Total Amount”:  Payroll Costs, plus Business Mortgage Interest Payments, Business Rent or Lease Payments, Business Utility Payments MINUS Total Salary/Hourly Wage Reduction (from PPP Schedule A, line 3)

MULTIPLIED BY THE FTE Reduction Quotient (enter the number from PPP Schedule A, line 13 or enter 1.0 if the FTE Reduction Safe Harbor has been met and you have not reduced the number of employees or the average paid hours of your employees between January 1, 2020 and the end of the Covered Period)

  • PPP Loan Amount
  • Total Payroll Costs DIVIDED by 75% (note that you may not obtain forgiveness in an amount that exceeds the PPP Loan Amount)

Total FTE count must be the same or greater than pre-pandemic levels to qualify for full loan forgiveness; however, you may consider the FTE count in effect as of June 30, 2020 in determining whether you meet the threshold for full forgiveness. 

 

Are there any exemptions for maintaining staffing levels at pre-pandemic levels in qualifying for forgiveness?

The application does appear to include an exemption to the FTE count if jobs are restored by June 30, BUT as noted above the forgiveness amount is the smaller of the 75% payroll threshold, PPP Loan Amount, or the FTE “Modified Total” amount.  Therefore, your forgiveness amount will likely still be reduced if you did not spend enough on payroll costs because of the delay in rehiring.  If you did not spend the money on payroll costs, you can also save those funds to pay down the remaining balance. 

What happens to loan forgiveness if I attempt to rehire and the employee declines the offer?

SBA and Treasury instituted an exception excluding laid-off employees whom the borrower offered to rehire (for the same salary/wages and same number of hours) from the CARES Act’s loan forgiveness reduction calculation.  According to SBA FAQ 40 issued on May 13, 2020, the forgiveness amount will not be reduced for employee reductions related to:

  1. Individuals to whom the borrower has made a written offer in good faith to rehire but the employee declined;
  2. Employees whose employment was terminated for cause; or
  3. Employees who voluntarily resigned.

Documentation will be required to support any such exemptions.  In addition, employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.

How might my forgiveness amount be reduced if my Full-Time Equivalent employee count is reduced?

The instructions for line 11 of the application indicate that it is the Borrower’s election, to use either

  1. February 15, 2019 to June 30, 2019;
  2. January 1, 2020 to February 29, 2020; or
  3. In the case of seasonal employers, either of the preceding periods or a consecutive twelve-week period between May 1, 2019 and September 15, 2019.

Again, the application instructions remind the Borrower that the calculations on lines 11, 12, and 13 will be used to determine whether the Borrower’s loan forgiveness amount must be reduced based on reductions in full-time equivalent employees, as required by the statute.

It again specifies that the actual loan forgiveness amount that the Borrower will receive may be reduced if the Borrower’s average weekly FTE employees during the Covered Period (or the Alternative Payroll Covered Period) was less than during the Borrower’s chosen reference period. The Borrower is only exempt from such a reduction if the FTE Reduction Safe Harbor applies, which we discuss above. Note there is no reference to restoring FTE within 75% of pre-pandemic levels in the application.

 

What happens to my forgiveness amount if I received an EIDL after I applied for the PPP?

The CARES Act only contemplated refinancing EIDLs received before April 3.  EIDL advances did not have to be repaid.  The new application, however, appears to deduct the amount of any EIDL advance from your forgiveness amount.  More guidance is necessary; however, if you received an EIDL advance you should consider setting aside that money to pay down your PPP loan if you do not wish to carry a loan balance in the event it is not forgiven.

Other Helpful Information

Non-Affiliated PPP Providers

We are unable to accept additional PPP applications, but we have been told that the following organizations may be able to provide assistance.  Please note that this listing is not intended to be a complete list of available providers nor does inclusion on this list represent ARB’s support or endorsement of these providers:

Harvest Small Business Finance
Mason Hobson (619) 541-0875
https://www.harvestsbf.com/

Kabbage.com
https://www.kabbage.com/paycheck-protection-program-loans/

Lendio.com
https://www.lendio.com/covid-relief/sba-paycheck-protection-program-loans/

Heartland.com
https://www.heartlandpaymentsystems.com/cares-act