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RELEASE: Updated Guidance For Paycheck Protection Program Loan Applications

Posted on Apr 11, 2020 in DFI, News Releases

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS

DIVISION OF FINANCIAL INSTITUTIONS

DAVID Y. IGE
GOVERNOR

CATHERINE P. AWAKUNI COLÓN
DIRECTOR

IRIS K. IKEDA

COMMISSIONER OF FINANCIAL INSTITUTIONS

FOR IMMEDIATE RELEASE

April 11, 2020

Updated Guidance For Paycheck Protection Program Loan Applications

Honolulu – In response to the Small Business Administration’s (SBA) recent announcement regarding additional requirements and amended loan processing timelines for loan originating banks and financial institutions processing the Paycheck Protection Program (PPP), the Department of Commerce and Consumer Affairs, Division of Financial Institutions provides further guidance to assist businesses with the necessary information to ensure PPP applications are processed quickly.

“The SBA PPP requirements continue to evolve and updates in practice requires banks and financial institutions to fund PPP loans within 10 days,” says Iris Ikeda, Commissioner of Financial Institutions. “We want to make sure our small businesses get their loan funds soon. Our local banks need the documentation to validate the businesses meet the requirements of the PPP loan program.”

To process additional due diligence aligned to the SBA certifications, local institutions may require additional loan application documentation that were previously not required in the initial PPP applications. Prospective applicants are encouraged to provide documents including the following list when applying for a PPP loan, and those who have previously applied are strongly encouraged to provide updated documentation as requested by your local institution.

Small Businesses (fewer than 500 employees)

  • Date of incorporation/formation; need to be in business as of Feb 15, 2020
  • Business Legal Name & Address
  • DBA or Tradename
  • Business TIN
  • Business phone
  • Primary contact
  • Applicant ownership
  • NAICS code
  • Number of employees—not including independent contractors—who reside in the U.S. (no H-2 employees)
  • Dollar amount of average monthly payroll costs for the preceding calendar year
  • Wages
  • Payroll taxes
  • Payroll processor records (if used)
  • Payroll tax filings
  • IRS Form 941 (quarterly wages)
  • IRS Form 944 (calendar year wages)
  • Healthcare costs paid by employer
  • Principal place of business in Hawaii

NOTE: Business are not eligible if a business owner owns 20% or more of the equity of the business and is presently incarcerated, on probation, on parole; submit to indictment, crimination information, arraignment, or other means of formal criminal charges OR within the last 5 years has been convicted or pleaded guilty of any felony, pleaded nolo contendere, placed on pretrial diversion or any type of parole or probation.

Sole Proprietors, Independent Contractors, Self-Employed

  • Proof business was in operation as of February 15, 2020
  • Bank account statements
  • Form 1099-MISC, or income and expenses from a sole proprietorship or self-employed
  • Sole proprietors – provide IRS form 1040 Schedule C and Schedule SE
  • If the applicant does not have the above documentation, the applicant must provide other supporting documentation to its lender, such as bank records, sufficient to demonstrate the qualifying payroll amount

Nonprofits

  • Nonprofit organizations must include IRS Form 990

Nearly $2.2 trillion in emergency economic relief will be made available through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law in late March.  Local and national banks will be processing Small Business Association (SBA) loans and in particular the Paycheck Protection Program (PPP) of the CARES Act.

The PPP authorizes up to $349 billion in loans to small businesses to pay their employees during the COVID-19 pandemic. The program is available to all businesses with 500 or fewer employees to include nonprofits, veterans’ organizations, tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors. Loans granted through the PPP will be at a fixed term and are to be used to cover payroll costs including healthcare benefits, loan and rent payments, and utilities. Loan forgiveness is subject to the borrower using all of the loan proceeds for forgivable purposes and maintaining its employee and compensation levels.

On April 3rd, loan applications were opened for small businesses and sole proprietors and starting April 10th, independent contractors and self-employed individuals would be able to apply. Applicants need to apply through an approved SBA lender or any federally insured financial institution and are strongly encouraged to apply as soon as possible while funding remains available.

More details and information about the program is available on the United States Treasury website at https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses. A borrower’s fact sheet can be found at https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf.

In order to receive the available financial assistance, the public is reminded that they need to reach out to their financial institution to request the assistance and to discuss what options are available to them.

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The Hawai‘i Division of Financial Institutions (DFI) ensures the safety and soundness of state-chartered and state-licensed financial institutions, and ensures regulatory compliance by state-licensed financial institutions, escrow depositories, money transmitters, mortgage servicers, mortgage loan originators and mortgage loan originator companies, by fairly administering applicable statutes and rules, in order to protect the rights and funds of depositors, borrowers, consumers and other members of the public. Website: http://cca.hawaii.gov/dfi/. Twitter: @HawaiiDFI

 

Media Contact:

William Nhieu

Communications Officer

Department of Commerce and Consumer Affairs

Email: [email protected]