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The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. It created an estimated $2 trillion package, which specifically allots $10 Billion for Economic Injury Disaster Loans (EIDLs) and $350 billion for Paycheck Protection Loans (PPP) to help small businesses.

Citizens Bank & Trust is commmitted to helping small business navigate thte COVID-19 loan relief options. The Paycheck Protection Program (PPP), part of the CARES Act stimulus package, is a federal loan program aimed at helping small businesses who have been severely impacted by COVID-19. Once the U.S. Small Business Administration (SBA) releases details and guidance on the Paycheck Protection Program, Citizens Bank & Trust plans to be providing these loans. 

1.  Economic Injury Disaster Loan (EIDL)

The Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) are the first line of support. These loans aren’t new. They’ve always been available in the event of disaster. However, this is the first time a virus or pandemic event has been defined as a disaster. Because of that declaration, businesses in every state and territory are now eligible to apply for Economic Injury Disaster loans. You can apply for EIDL directly with SBA.

2.  Paycheck Protection Program (PPP)       

The second phase of PPP included an addition to the borrower's certifications aimed at ensuring the use of the proceeds were for those borrowers most in need. Companies must now certify in good faith that the "loan request is necessary" due to a lack of "other sources of liquidity". Further, any company that already received funds but should not have based on these requirements, will be allowed to return the money by May 14, 2020, without risk of penalty.

Please see Program Rules - Frequently Asked Questions provided by the U.S. Department of Treasury. Please be aware that these FAQs are regularly updated, and may be reached at the button below.

Program Rules - Frequently Asked Questions

Please see our package below including our checklist, the PPP Application, and ABA CARES Act Small Business Assistance guide. Please contact your Citizens Banker to apply.

  1. Citizens Bank & Trust PPP Checklist
  2. Paycheck Protection Program Application
  3. Alabama Bankers Association CARES Act Small Business Assistance Guide

The CARES Act’s Paycheck Protection Program Loan Guarantee offers another source of help. Under this program, the SBA backs small-business loans through local lenders and approved SBA banks.

Starting April 3rd, small businesses and sole proprrietorships can begin to apply  Starting April 10th, independent contractors and self-employed individuals can begin to apply.  All loan terms will be the same for everyone.  Please see details below.

  • Offered to small businesses with fewer than 500 employees, select types of business with fewer than 1,500 employees, 501(c)(3) non-profits with fewer than 500 workers and some 501(C)(19) veteran organization (have to be in operation before February 15, 2020)
  • Self-employed, sole proprietors, freelance and gig economy workers are also eligible to apply (again, you have to be in operation before February 15, 2020)
  • Loans are given up to a maximum of the lesser of $10 million, or 2.5 times the average monthly payroll costs – including wages for employees making under $100,000, as well as expenses for paid sick leave, healthcare and other benefits – during the 1-year period before the date on which the loan was made
  • The interest rate for the program is 1.0%
  • The loan term is up to 2 years
  • No personal guarantee or collateral is required for the loan
  • You can only apply for this program one time – multiple application aren’t permitted.
  • Payments are deferred up to six (6) months.
  • Part of this loan may be forgiven and you can submit a request through your approved SBA bank and 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.

As with the $10,000 advance in EDILs, loan forgiveness provisions are generous. Loans are forgiven when the proceeds are used for any of these costs:

  • Payroll costs, excluding prorated amounts for individuals with compensation greater than $100,000
  • Rent pursuant to a lease in force before February 15, 2020
  • Electricity, gas, water, transportation, telephone, or internet access expenses for services which began before February 15, 2020
  • Group health insurance premiums and other healthcare costs.

PLEASE BE CAUTIOUS.... in order for the amounts to be forgiven, businesses must maintain the same average number of employees for the first eight-week period beginning on the origination date of the loan as you did from February 15, 2019 – June 30, 2019 or from January 1, 2020 until February 15, 2020. If you don’t meet this requirement, the amount forgiven is reduced. You incur additional reductions if you cut compensation for employees who make under $100,000 by more than 25%, as compared to the most recent quarter. The US Chamber of Commerce offers a step-by-step calculation here.

Additional Paycheck Protection Program Information:

Small Business Paycheck Protection Program
PPP Information Sheet for Borrowers

As a business owner, you must personally certify that your company qualifies as a small business. Check the North American Industry Classification System (NAICS) small business standards.

PPP Loan Guidance for Recipients     

Please contact your Citizens Banker if you have questions.
his information was updated on 5/6/2020, and is subject to further updates.