Note: The U.S. Small Business Administration announced that PPP funds have been fully exhausted. As a result, Cathay Bank is not accepting new PPP loan applications.
On February 22, the Biden Administration and the United States Small Business Administration (US SBA) announced significant changes to the PPP which are briefly summarized below.
Taking into the above detailed changes into consideration, at this time we recommend businesses with 19 employees or less to still apply right away on our website via application link.
For businesses with 20 employees or more, we encourage you to still apply with us. However, please do take note we will not be able to submit these applications to the SBA until March 10. But in the meantime, we highly recommend you still submit your application into our portal and have your documentation in order so that we can immediately submit to the SBA platform once it is re-opened to everyone again on March 10.
Please note that Cathay Bank is currently processing PPP forgiveness applications for the 1st draw PPP loans in manageable batches. When your PPP loan is selected to apply for forgiveness, you will be notified via email with an invitation link to apply online. Please be assured that you have until 10-months from the end of your covered period (8 or 24 weeks) to apply for loan forgiveness.
After several months of contentious negotiations, a new $900 billion COVID-19 relief package was unveiled by Congress on December 21, 2020. Since then, both the House and the Senate have quickly passed this new bill. The new stimulus bill, which will include $284 billion in new funding for another draw of the Paycheck Protection Program (“PPP”) as well as a new tiered, simplified process for loan forgiveness for loans up to $2 million, was signed by President Trump on December 27, 2020.
Here are the highlights for the Second Draw PPP based on the information we have at this time:
— For businesses with NAICS code starting 72 (Accommodation and Food Services), loan amount calculations will be based on 3.5x the monthly average payroll.
Please also note the additional timeline included in the new bill:
We are also happy to announce that for the next draw of PPP funding, we have enhanced and automated the loan origination process. All applications and required documentation will be submitted through an online portal for your convenience.
The new bill will also provide changes to the PPP loan forgiveness process. Specifically, the changes would provide for a tiered forgiveness application process that would reduce the required paperwork to varying degrees for both loans under $150,000 and for loans between $150,001 to $2,000,000. Below are some general details on the expected changes based on the new bill:
— Any advances already deducted will be retroactively paid to the borrower by the SBA once procedures are established.
We will be offering the PPP loans to businesses located in states with a Cathay Bank Branch.
Please note that we will be requiring a Cathay Bank Business Checking Account prior to completing applications as we will need disbursement account information.
As of May 5, 2021
Community financial institutions will be able to make First Draw PPP loans on Monday, January 11, and Second Draw PPP loans on Wednesday, January 13. The PPP will open to all other participating lenders, including Cathay Bank, shortly thereafter. Cathay Bank will start accepting PPP loan applications on Monday, January 11 and will submit the applications in the queue to SBA for processing as soon as the portal allows us to do so.
As of January 10, 2021
Cathay Bank will only be accepting applications via a separate online portal. The website link will be available to all Applicants on Monday, January 11. Please check the bank’s website cathaybank.com frequently for updates.
As of January 10, 2021
No. We will not be able to accept any hand-written applications in person or via email. All applications must be submitted electronically through our online application portal. The link will be provided on our website.
As of January 10, 2021
No. The Paycheck Protection Program was initiated primarily to ensure that employees in the U.S. are paid due to wage interruptions caused by the COVID-19 pandemic. Please be advised that any portion of the loan that is not forgiven will be payable and due based on loan terms set forth by the program. Applicants should utilize this program responsibly while taking into consideration that debt forgiveness is not guaranteed approval and subject to extensive eligibility requirements & documentation after the loan is funded. Submission of a completed application package does not automatically guarantee processing or approval from the lender and U.S. Small Business Administration. Applicants should also take into consideration their ability to repay all or a portion of this loan.
As of January 10, 2021
The lesser of $2,000,000 or 2.5 times your average monthly payroll costs during FY 2019 or FY 2020 period. For businesses with NAICS code starting 72 (Accommodation and Food Services), maximum loan amount will be based on 3.5 times the average monthly payroll costs.
As of January 10, 2021
March 31, 2021, or until program funds are exhausted.
As of January 10, 2021
You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, utilities, covered operations expenditures, covered property damage, covered supplier costs, or covered worker protection expenditures over the 8 – 24 weeks after getting the loan. Not more than 40% of the forgiven amount may be for non-payroll costs.
As of January 10, 2021
At least 60% of the loan amount must be used for payroll expenses and 40% on qualified expenses to be eligible for full forgiveness. If less than 60% of the debt forgiveness amount was used for payroll expenses, the borrower may qualify for partial forgiveness.
As of January 10, 2021
Only one.
As of January 10, 2021
1.00% fixed.
As of January 10, 2021
In 5 years.
As of January 10, 2021
Yes. There are no prepayment penalties or fees.
As of January 10, 2021
No. Collateral will not be required for this loan.
As of January 10, 2021
No. There is no personal guarantee requirement. However, if your loan proceeds are used for fraudulent purposes, the U.S. government will pursue criminal charges against you.
As of January 10, 2021
For loan amounts $150,000 and less, no supporting documents will be required at the time of application submission; however, upon or before seeking loan forgiveness (or upon SBA request) the Applicant must provide supporting documentation. For loan amounts greater than $150,000, supporting documents will be required at the time of application submission.
As of January 10, 2021
Payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave (except those paid leave amounts for which a credit is allowed under FFCRA Sections 7001 and 7003); allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage (including insurance premiums), group life, disability, vision, or dental insurance, and retirement benefits; payment of state and local taxes assessed on compensation of employees; and, for an independent contractor or sole proprietor, wage, commissions, income, or net earnings from self-employment or similar compensation.
As of January 10, 2021
Most Applicants will use the average monthly payroll for 2019 or 2020, excluding costs over $100,000 on an annualized basis, as prorated for the period during which the payments are made or the obligation to make the payments is incurred, for each employee. For seasonal businesses, the Applicant may elect to instead use average total monthly payroll for any twelve-week period selected by the Applicant between February 15, 2019 and February 15, 2020, excluding costs over $100,000 on an annualized basis, as prorated for the period during which the payments are made or the obligation to make the payments is incurred, for each employee. For new businesses without 12 months of payroll costs but that were in operation on February 15, 2020, average monthly payroll may be calculated based on the number of months in which payroll costs were incurred, excluding costs over $100,000 on an annualized basis for each employee, as prorated for the period during which the payments are made or the obligation to make the payments is incurred, for each employee.
As of January 10, 2021
In determining whether the Applicant experienced at least a 25% reduction in gross receipts, for loans above $150,000, the Applicant must identify the 2020 quarter meeting this requirement, identify the reference quarter, and state the gross receipts amounts for both quarters, as well as provide supporting documentation. For loans of $150,000 and below, these fields are not required and the Applicant only must certify that the Applicant has met the 25% gross receipts reduction at the time of application; however, upon or before seeking loan forgiveness (or upon SBA request) the Applicant must provide documentation that identifies the 2020 quarter meeting this requirement, identifies the reference quarter, states the gross receipts amounts for both quarters, and supports the amounts provided.
As of January 10, 2021
For all entities other than those satisfying the conditions set forth below, Applicants must demonstrate that gross receipts in any quarter of 2020 were at least 25% lower than the same quarter of 2019. Alternatively, Applicants may compare annual gross receipts in 2020 with annual gross receipts in 2019; applicants choosing to use annual gross receipts must enter “Annual” in the 2020 Quarter and Reference Quarter fields and, as required documentation, must submit copies of annual tax forms substantiating the annual gross receipts reduction.
As of January 10, 2021
No. Any forgiveness amount already received by the Applicant from the First Draw PPP loan will not count towards gross receipts.
As of January 10, 2021
No. U.S. SBA will not be able to process the Second Draw PPP loan request until your First Draw PPP loan is in good standing and no longer in SBA review status.
As of January 10, 2021
No.
As of January 10, 2021
Yes. However, you cannot apply for the Paycheck Protection Loan for the same use of proceeds requested in the SBA Economic Injury Disaster Loan. For example, you cannot receive an SBA Economic Injury Disaster loan and Paycheck Protection Program loan for payroll expenses; however, you could get a loan for working capital through the SBA Economic Injury Disaster loan and apply for payroll related assistance through the Paycheck Protection Program.
As of January 10, 2021
a. An Applicant is not eligible for a Second Draw PPP loan if the Applicant is:
b. Since this is the only information available at this time, please consult with your legal counsel for further interpretation
As of January 10, 2021
www.sba.gov/ppp or www.treasury.gov/cares
As of January 10, 2021
Yes, Cathay Bank is currently processing PPP forgiveness applications for the 1st and 2nd round PPP loans in manageable batches. When your PPP loan is selected to apply for forgiveness, you will be notified via email with an invitation link to apply online. Please be assured that you have until 10-months from the end of your covered period (8 or 24 weeks) to apply for loan forgiveness.
As of December 24, 2020
To receive loan forgiveness, the Borrower must complete and submit the Loan Forgiveness Application (SBA Form 3508) along with supporting documents to the lender. As a general matter, the lender will review the application and make a decision regarding loan forgiveness. The lender has 60 days from receipt of a complete application to issue a decision to SBA. Borrowers will not have to make the PPP loan payments until the debt forgiveness decision is made.
As of June 15, 2020
Borrowers who received PPP loan proceeds prior to June 5, 2020, can choose to extend the 8-week period (known as the “covered period”) to 24-weeks. Borrowers who received PPP loan proceeds on or after June 5, 2020, will have a 24-week covered period. The PPP Flexibility Act was designed to make it easier for more borrowers to reach full, or almost full, forgiveness.
As of June 15, 2020
On the first day of loan disbursement or on the first day that payroll expenses are paid on the normal payroll cycle. Covered period cannot extend beyond December 31, 2020.
As of June 15, 2020
At least 60% of the debt forgiveness amount must be used for payroll expenses and 40% on qualified expenses to be eligible for full forgiveness. If less than 60% of the debt forgiveness amount was used for payroll expenses, the borrower may qualify for partial forgiveness.
As of June 15, 2020
Borrowers can use the 24-week covered period to restore their workforce levels and wages to pre-pandemic levels required for full forgiveness. This must be done by December 31, 2020, a change from the previous deadline of June 30, 2020.
As of June 15, 2020
If the Borrower received the SBA Loan Number on June 5, 2020, or later, the repayment term will be 5-years with 1.00% interest. If the Borrower received the SBA Loan Number prior to June 5, 2020, the repayment term will be 2-years with 1.00% interest.
As of June 15, 2020
No. Employees whom the borrower offered to rehire are generally exempt from the CARES Act’s loan forgiveness reduction calculation. Borrower must maintain documentation evidencing the rehiring efforts.
As of June 15, 2020
Yes, the amount of loan forgiveness for owner-employees and self-employed individuals’ payroll compensation can be no more than $15,385 when using the 8-week covered period and $20,833 when using the 24-week covered period per individual.
As of December 24, 2020
The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone. Eligible use of proceeds includes the following:
As of April 7, 2020
No. The Paycheck Protection Program was initiated primarily to ensure that employees in the U.S. are paid due to wage interruptions caused by the COVID-19 pandemic. Please be advised that any portion of the loan that is not forgiven will be payable and due based on loan terms set forth by the program. Applicants should utilize this program responsibly while taking into consideration that debt forgiveness is not guaranteed approval and subject to extensive eligibility requirements & documentation after the loan is funded. Submission of a completed application package does not automatically guarantee processing or approval from the lender and U.S. Small Business Administration. Applicants should also take into consideration their ability to repay all or a portion of this loan.
As of April 7, 2020
All businesses – including nonprofits, veterans’ organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply. Businesses in certain industries can have more than 500 employees if they meet the applicable SBA employee-based size standards for those industries.
As of April 7, 2020
Only one.
As of April 7, 2020
As of April 7, 2020
Payroll costs include:
As of April 7, 2020
The lesser of $10,000,000 or 2.5 times your average monthly payroll costs for the past year. Please refer to the calculation worksheet provided separately.
As of April 7, 2020
1.00% fixed.
As of April 7, 2020
Yes. There are no prepayment penalties or fees.
As of April 7, 2020
No. Collateral will not be required for this loan.
As of April 7, 2020
No. There is no personal guarantee requirement. However, if the loan proceeds are used for fraudulent purposes, the U.S. government will pursue criminal charges against you.
As of April 7, 2020
Yes. However, you cannot apply for the Paycheck Protection Loan for the same use of proceeds requested in the SBA Economic Injury Disaster Loan. For example, you cannot receive an SBA Economic Injury Disaster loan and Paycheck Protection Program loan for payroll expenses; however, you could get a loan for working capital through the SBA Economic Injury Disaster loan and apply for payroll related assistance through the Paycheck Protection Program.
As of April 7, 2020
No. However, you are eligible to apply for relief assistance through the SBA Economic Injury Disaster loan program.
As of April 7, 2020
Please contact our SBA Department for all your SBA Loan needs at 866-228-4296 or speak with your local Cathay Bank branch manager.
