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Coronavirus Small Business Assistance: Paycheck Protection Program

Learn more about the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Cadence Bank is committed to helping small businesses maneuver COVID-19 relief options. As you work to support your own employees and customers during this pandemic, we’re here to offer assistance and help you navigate your financial concerns.


The CARES (the Coronavirus Aid, Relief, and Economic Security) Act was recently passed into law. This $2 trillion-dollar act includes a significant provision known as the Paycheck Protection Program, which sets aside $350 billion in financial relief to help small businesses during this economic downturn. On April 24, lawmakers approved an additional $310 billion in funding for the Paycheck Protection Program.


The program, managed by the Small Business Administration (SBA), provides 100% federally guaranteed loans to small businesses with 500 or fewer employees to assist with payroll, healthcare costs, rent, utilities and mortgage interest.


As an SBA preferred lender, Cadence Bank will be facilitating Paycheck Protection Program loan applications for existing business clients. Please contact your Cadence Bank Relationship Manager for assistance.


We invite you to learn more by taking a look at the Paycheck Protection Program Fact Sheet or the U.S. Chamber of Commerce's checklist and guide. Additionally, check out our Paycheck Protection Program FAQs below or download our Paycheck Protection Program versus Economic Injury Disaster Loan infographic.


PPP vs. EIDL Infographic



Additional information on our COVID-19 Operational Resiliency Plan can be found here.



CARES Act Paycheck Protection Program FAQs


For frequently asked questions regarding participation of faith-based organizations in the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan Program (EIDL), click here.


Q1. What is the CARES Act?


The Coronavirus Aid, Relief, and Economic Security Act, widely known as the CARES Act, is an estimated $2 trillion-dollar stimulus package signed into law on March 27, 2020. Within the CARES Act there is a section of the bill that provides $349 billion in financial assistance for the Small Business Administration (SBA).


Q2. What is the Paycheck Protection Program?


The Paycheck Protection Program (PPP) is an expansion of the SBA 7(a) loan program, set in place to help small businesses during these uncertain times. This loan provides financial assistance through 100% federally guaranteed loans to employers who maintain their payroll during this crisis. The most intriguing part of the program is if an employer maintains their payroll, they can be eligible to be forgiven up to 100% of the loan.


Q3. When can I apply for the PPP loan?


Starting April 3, 2020, small businesses can apply for and receive loans to cover their payroll and other certain expenses through Cadence Bank or other existing SBA lenders. This date is subject to change based on when your bank is prepared to submit loan applications to the SBA. 


Q4. Where can I apply?


PPP loan applications are limited to existing Cadence Bank business clients. Applications may be submitted via our online loan application portal for processing by June 30, 2020. Contact your relationship manager for additional information.


Q5. Who can apply for a PPP loan?


Businesses with 500 or fewer employees, including:


  • Small businesses
  • 501(c)(3) organizations
  • Tribal businesses in section 31(b)(2)(C) of Small Business Act
  • 501(c)(19) Veterans organizations
  • Hotel and food service companies (NAICS code 72) with fewer than 500 employees per location


Q6. What can I use the PPP loan for?


There are several approved uses for the PPP loan, including:


  • Payroll expenses
  • Employee salaries (including full-time and part-time employees)
  • Mortgage Interests
  • Rent and utilities


Q7. What payroll expenses are eligible under the PPP loan?


The following are the expense eligible under the PPP loan:


  • Salary, wages and commission
  • Health and retirement benefits
  • State and local taxes
  • Vacation, parental, family or sick leave


Q8. How many PPP loans can I take out?


Just one. But there are other relief measures you may be eligible to apply for, such as an SBA Economic Injury Disaster Loan.


Q9. What do I need to apply?


You will need to complete Cadence Bank’s online loan application and submit the application with all required documentation to Cadence for processing by June 30, 2020.


Q10. What other documents will I need to include in my application?


You will need to provide Cadence Bank with payroll processor records, payroll tax filings, Form 1099-MISC, or income and expenses from a sole proprietorship to establish loan eligibility. 


For borrowers that do not have any such documentation, the borrower must provide other supporting documentation, such as bank records, sufficient to demonstrate the qualifying payroll amount. 


Q11. How much can a small business borrow through the PPP loan?


Loans can be for up to two months of the client's average monthly payroll costs from the last year plus an additional 2.5X of that amount, up to $10 million. Payroll costs are capped at $100,000 on an annualized basis for each employee.


If borrowers have already taken the SBA Economic Injury Disaster Loan (EIDL) for the timeframe of January 31, 2020 through April 3, 2020, they can add that outstanding loan amount to the full amount borrowed. 


Q12. What is does “loan forgiveness” mean?


The Paycheck Protection Program was set to ensure businesses can retain employees during this economic downturn. Borrowers are eligible for “loan forgiveness” equal to the amount spent by the borrower during the eight-week period starting on the date the lender makes the first disbursement of the PPP loan to the borrower. Meaning, if you keep your business open and employees (full-time or part-time) on the payroll, they will receive 100% “loan forgiveness” for those eight weeks. You will owe money when your loan is due if you used the loan for anything other than payroll costs, mortgage interest, rent and utilities over the eight weeks after receiving the loan.


Not more than 25% of the "loan forgiveness" amount may be attributable to non-payroll costs.


If you must lay off employees, the “loan forgiveness” will be reduced by the number of employees removed from payroll and if you decrease salaries and wages by more than 25% for any employee making less than $100,000 in annualized wages in 2019. If you have already laid off some employees, you can still be forgiven for the full amount of your payroll cost if you rehire their employees by June 30, 2020.


To request loan forgiveness, submit a request with the required documentation, and certifying them to be true, to Cadence Bank should we be servicing your loan. Cadence must make a decision on the forgiveness within 60 days of the request.


Q13. What timeframe does the PPP loan cover?


The eight-week period begins on the date the lender makes the first disbursement of the PPP loan to the borrower. The lender must make the first disbursement of the loan no later than ten calendar days from the date of loan approval.


Q14. When is my PPP loan due?


You have up to two years to pay back the loan. However, you can pay the loan back sooner as there is no prepayment penalty fee.


Q15. What is the PPP interest rate?


The annual percentage rate is fixed at 1.00%.


Q16. When do I need to start paying interest on my loan?


All payments are deferred for six months; however, interest will continue to accrue over this period.


Q17. Do I need leverage capital to be granted a PPP loan?


No, the PPP loans are risk rated at 0%, meaning Cadence Bank does not need to hold capital.


Q18. What is the PPP loan deadline?


Applicants can apply for the PPP loan until June 30, 2020. The SBA is encouraging small businesses to apply quickly as there is a funding cap.


Q19. Do businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?


In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application.


Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.


For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification. Lenders may rely on a borrower’s certification regarding the necessity of the loan request. Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.


Q20. What do I need to certify?


As part of the application, clients need to certify in good faith that:


  • The applicant was in operation on February 15, 2020 and had employees for whom it paid salaries and payroll taxes or paid independent contractors, as reported on a Form 1099-MISC.
  • Current economic uncertainty makes the loan necessary to support their ongoing operations.
  • The funds will be used to retain workers and maintain payroll or to make mortgage, lease and utility payments.
  • During the period beginning on February 15, 2020 and ending on December 31, 2020, the applicant has not and will not receive another loan under this program.
  • They will provide to the lender documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments and covered utilities for the eight weeks after getting this loan.
  • Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments and covered utilities. Not more than 25% of the forgiven amount may be for non-payroll costs.
  • All the information the applicant provided in their application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program is punishable by law.
  • Applicant acknowledges that the lender will calculate the eligible loan amount using the tax documents they submitted. They affirm that the tax documents are identical to those they submitted to the IRS. And they also understand, acknowledge and agree that the lender can share the tax information with the SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.


Q21. Are there any other incentives by the U.S. Government to help small business during this economic downturn?


Yes! Borrowers can apply for the PPP loan and other financial relief measures, including the SBA’s Economic Injury Disaster Loans (EIDL). However, it’s important to note that while clients can apply for both the PPP loan and the EIDL, they cannot be used for the same purpose.









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