April 27, 2020 - Update

The SBA will resume accepting Paycheck Protection Program applications on Monday, April 27, 2020 at 10:30am EDT.

Apply for PPP

Arbor Financial is participating in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was recently passed to provide emergency relief for small- to medium-sized businesses disrupted by COVID-19. The Act created the Paycheck Protection Program, which will serve as an extension of the Small Business Administration (SBA) 7(a) loan program, allowing financial institutions to provide federally-backed, forgivable loans to eligible businesses.

Program Overview

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

The Paycheck Protection Program will be available through June 30, 2020.

Loan Forgiveness

For those who have received a PPP Loan, the loan forgiveness process is likely top of mind for you. While this situation remains fluid, and many final details have yet to be disseminated by the Small Business Administration and the Department of Treasury, we want to provide you with support and tools to get ready for the next phase.

PPP Interim Final Rule - Requirements - Loan Forgiveness

At this time, the application window for forgiveness has not opened, so the most important step you can be working on is the collection and retention of documentation in support of the forgiveness. 

Documentation will be needed for each category:

  • Payroll (including FTE retention calculation)
  • Utilities
  • Rent
  • Interest paid

Below is a link to the PPP Loan Forgiveness Application, as well as a PPP Loan Forgiveness Calculator for your convenience and direction, as you compile your documentation.

PPP Loan Forgiveness Application

PPP Forgiveness Calculator

Program Q&As:

The Paycheck Protection Program (PPP) is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

The Paycheck Protection Program will be available through June 30, 2020.

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.  Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

This loan has a maturity of 2 years and an interest rate of 1%.

Please complete this contact form, and a representative from Arbor Financial will contact you about the application process.

This program is for any 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.

Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.

Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.

Loans can made up to 2.5 times your average monthly payroll costs, not to exceed $10 million.

Your monthly payroll includes wages, tips, group health, retirement benefits and employer paid taxes, but excludes the amount of compensation to individuals in excess of $100,000.  The maximum loan amount is the lesser of that value, or $10,000,000.

Seasonal businesses and businesses not in operation from February 15, 2019 to June 30, 2019 are subject to a different measurement in determining average monthly payroll.

Please note the following checklist is preliminary list if expected documentation required to complete the application for the Payroll Protection Program Loan.  Final guidance from the Treasury Department and Small Business Administration is pending the required application materials are subject to change.  Additional information may be required.

  1. 2019 IRS Quarterly 940, 941 or 944 payroll tax reports.
  2. Payroll reports for a twelve-month period (ending on your most recent payroll date), which will show the following information:

    i. Gross wages for each employee, including officer(s) if paid W-2 wages.

    ii. Paid time off for each employee

    iii. Vacation pay for each employee

    iv. Family medical leave pay for each employee

    v. State and local taxes assessed on an employee’s compensation

  3. 1099s for independent contractors for 2019
  4. Documentation showing total of all health insurance premiums paid by the company owner(s) under a group health plan.

    i. Include all employees and the company owners.

  5. Document the sum of all retirement plan funding that was paid by the company owner(s) (does not include funding that came from the employees out of their paycheck deferrals).

    i. Include all employees, including company owners.

    ii. Include 401K plans, Simple IRA, SEP IRAs.

Yes, borrowers are eligible for loan forgiveness.

How much?
A borrower is eligible for loan forgiveness equal to the amount the borrower spent on the following items during the 8-week period beginning on the loan origination date:

  • Payroll costs (using the same definition of payroll costs as used to determine loan eligibility)
  • Mortgage interest incurred during the ordinary course of business
  • Rent paid on a lease agreement
  • Utility payments (gas, electric, water, telephone, internet)
  • Additional wages paid to employees who receive tips
The loan forgiveness cannot exceed principal. Payroll costs for compensation above $100,000 in wages are not eligible for loan forgiveness.

Are there risks of reduction in forgiveness?

The calculated loan forgiveness total above would be reduced if there is a reduction in the number of employees or a reduction of greater than 25% in wages paid to employees.

What if employees are brought back or wages are restored?

Reductions in employment or wages that occur during the period beginning on Feb. 15, 2020 and ending 30 days after enactment of the CARES Act, shall not reduce the amount of loan forgiveness IF by June 30, 2020 the borrower eliminates the reduction in employees or reduction in wages.

Covered loans that are not forgiven will have a maximum maturity of ten years from the date the borrower applies for the loan forgiveness.

We're Here For Your Business

Thank you for allowing us to stand by you and your business during this pandemic. We're here for you. To learn more about additional measures we are taking to help members during COVID-19, please visit our Coronavirus Update page.

Paycheck Protection Program Form

Please fill the contact form out and a representative will contact you.

Secure File Upload

Securely send and receive documents.

Secure File Upload

*Any loan made under the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program must be submitted to and approved by the SBA. There is limited funding available and so all applications submitted will not be approved and funded by the SBA. Arbor Financial anticipates high volume and there may be processing delays and system failures along with other issues that interfere with us taking your application or submission of any application to SBA. Arbor Financial does not represent or guarantee that it will take your application or submit any applications taken before SBA funding is no longer available or at all. By using Arbor Financial to seek a Paycheck Protection Program loan, you agree that Arbor Financial is not responsible or liable to you (i) if your application is not taken by Arbor Financial or any application is not submitted to the SBA until after SBA stops approving applications, for any reason or (ii) if your inquiry or any application is not processed. You also forever release and waive any claims against Arbor Financial concerning failure to obtain a loan. This release and waiver applies to but is not limited to any claims concerning Arbor Financial's (i) pace, manner or systems for processing or prioritizing your inquiry or any resulting applications, or (ii) representations by Arbor Financial regarding the application process, the Paycheck Protection Program, or availability of funding. Your business must be a member of and in good standing with Arbor Financial Credit Union. If you are not a current member, you can apply for membership by calling 269.544.3106 to schedule an appointment with an Arbor Financial representative.
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