Paycheck Protection Program through CARES Act

 

Important Update on Paycheck Protection Program

as of May 5, 2021

As of May 5, 2021, SBA funding for the Paycheck Protection Program has been depleted. At this time, First Commerce Credit Union is no longer accepting PPP applications and the PPP application portal has stopped accepting applications for loans. Applications in process will be impacted by this change. Please contact your lender to discuss the status of your request.

Since the program’s launch in early 2020, the First Commerce Business Services team has processed nearly $35 million in PPP loans, which have enabled our local businesses to save thousands of jobs in the communities we serve. Outside of PPP, we also offer a variety of other solutions designed to meet your business needs. Please contact a member of our business services team to learn more. 

For additional information and updates about PPP and other SBA relief programs, visit the SBA COVID-19 web page at: sba.gov/funding-programs/loans/covid-19-relief-options or Treasury.gov/CARES.


Update on PPP Loan Forgiveness

In August of 2020, First Commerce began accepting PPP Forgiveness Applications. Many of our PPP recipients have applied for forgiveness and others have opted to wait. 

Under the recently past, Consolidated Appropriations Act 2021 (CAA2021), the SBA will be releasing a simplified Forgiveness application for loans under $150,000.  This is expected to be released in January 2021.

The Economic Aid Act repealed the requirement to deduct existing EIDL loans from forgiveness, which was a growing concern of PPP recipients. For our borrowers who have questions about how this may impact them, please continue to work directly with your First Commerce PPP lender.

To apply for PPP Loan Forgiveness, please send your completed Forgiveness Application*, along with supporting documents, to your First Commerce PPP lender via email.

*The SBA has provided three versions (full, EZ and Simplified) of the forgiveness application, which may be found at SBA.gov or you can request one from your lender.


Keep Employees on the Payroll with the Employee Retention Credit

There are tax incentives for small businesses affected by COVID-related shutdowns and disruptions. These benefits are available NOW! The credits can hit your bottom line cash flow as soon as your next quarterly filing and are available for all four quarters of 2021.

These credits may deliver cash flow for your business as soon as you claim them. You can file for this credit for every quarter of 2021 on your form 941 filing and may also receive an advance payment of a portion of the credit.

Qualifications for Employee Retention Credit:

If your business:

  • Has 500 or fewer employees;
  • Was at least partly closed due to a government order OR the business’s revenue declined by 20% or more for any quarter this year; AND
  • You kept employees on the payroll: You may be eligible for 2021 employee retention tax credits of up to $28,000 per employee. And the longer you keep your employees on payroll, the more benefits you are eligible to receive.

For 2021, the employee retention credit (ERC) is a quarterly tax credit against the employer’s share of certain payroll taxes. The tax credit is 70% of the first $10,000 in wages per employee in each quarter of 2021. That means this credit is worth up to $7,000 per quarter and up to $28,000 per year, for each employee. If the amount of the tax credit for an employer is more than the amount of the employer’s share of those payroll taxes owed for a given quarter, the excess is refunded – paid – directly to them.

To see whether your business is eligible for the ERC for a given quarter, start by determining whether:

(1) your business was fully or partially shut down due to a governmental order during any part of the quarter, or (2) the business’s gross receipts in a quarter declined more than 20% compared to either (a) the same quarter in 2019 or (b) the immediately preceding quarter in 2020 or 2021.

If the answer to either question is YES, and the business had 500 or fewer employees, then any wages paid in the quarter may count towards the $10,000 per employee amount.

Businesses that received PPP loans in 2020 or 2021 can still claim the ERC. While wages used to apply for PPP loan forgiveness cannot also be claimed as ERC wages, remaining wages may be eligible for the credit.

The ERC is also available for the last two quarters of 2021 for certain small businesses that opened after February 15, 2020. These businesses, if they have less than $1 million in annual gross receipts, may claim ERCs of up to $50,000 per quarter, even if the businesses have not been shut down or experienced declines in revenue.

*First Commerce does not provide tax, legal or accounting advice. The information contained here is for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your tax, legal or accounting advisors for further guidance.