SBA Paycheck Protection Program (CARES Act)

Keys Federal Credit Union has been helping Keys’ small business members for over 80 years! Count on us to help you process your Paycheck Protection Program applications. To date, we’ve disbursed over $6.2 million in PPP loans and helped over 800 locals remain employed. Thank you for being a member and for looking after your employees. When we work together, the whole community wins. Locals Helping Locals is the Keys FCU Difference.

For more information and updates, visit SBA.gov/PPP or Treasury.gov/CARES 

Paycheck Protection Program 

The Paycheck Protection Program is a loan designed for small businesses to keep their employees on the payroll. If all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities, The SBA will forgive these loans. For more information, please read and download the SBA’s FAQs on PPP Loans.

Who Can Apply For a Second Draw PPP Loan

The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan. 

Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

Maximum loan amount and increased assistance for accommodation and food services businesses

For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. For borrowers in the Accommodation and Food Services sector, the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.

Second Draw PPP Application Process

First Draw PPP Loan Forgiveness

  • Loan Forgiveness is available if the funds were used for payroll costs, interest on mortgages, rent, and utilities.        

  • At least 75% of the forgiven amount must have been used for payroll.

  • Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.  

  • Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.  

To apply for loan forgiveness, please complete the appropriate application below.

PPP Loan Forgiveness Application Form 3508 (Revised 1/19/21)

PPP Loan Forgiveness Application Form 3508EZ (Revised 1/19/21)

PPP Loan Forgiveness Application Form 3508S (Revised 1/19/21)

Basic FAQs

For the most current and detailed information please go to www.sba.gov.

  • How can PPP Loans be Used?

    The proceeds of a PPP loan are to be used for:
    a. payroll costs (as defined in the Act).
    b. costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums.
    c. mortgage interest payments (but not mortgage prepayments or principal payments).
    d. rent payments.
    e. utility payments.
    f. interest payments on any other debt obligations that were incurred before February 15th, 2020.
    g. refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020. If you received an SBA EIDL loan from January 31, 2020 through April 3, 2020, you can apply for a PPP loan. If your EIDL loan was not used for payroll costs, it does not affect your eligibility for a PPP loan. If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan. Proceeds from any advance up to $10,000 on the EIDL loan will be deducted from the loan forgiveness amount on the PPP loan.

  • What Qualifies as "Payroll Costs"?

    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; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; 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.

  • Is there Anything that is Expressly Excluded from the Definition of Payroll Costs?

    Yes. The Act expressly excludes the following:
    a. Any compensation of an employee whose principal place of residence is outside of the United States.
    b. The compensation of an individual employee in excess of an annual salary of $100,000, prorated as necessary.
    c. Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee's and employer's share of FICA (Federal Insurance Contributions Act) and Railroad Retiremnt Act taxes, and income taxes required to be withheld from employees.
    d. Qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (Public Law 116-127).

  • Do Independent Contractors Count as Employees for Purposes of PPP Loan Calculations?

    No, independent contractors can apply for a PPP loan on their own, so they do not count for purposes of a borrower's PPP loan calculation.

  • What will be the maturity date on a PPP loan?

    The maturity date is two years from the date of disbursement.

  • When will I have to begin paying principal and interest on my PPP loan?

    You will not have to make any payments for six months following the date of disbursement of the loan. However, interest will continue to accrue on PPP loans during this six-month deferment.

  • Can my PPP loan be forgiven in whole or in part?

    Yes. The amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest. That is, the borrower will not be responsible for any loan payment if the borrower uses all the loan proceeds for forgivable purposes described below and employee and compensation levels are maintained. The actual amount of loan forgiveness will depend, in part, on the total amount of payroll costs, payments of interest on mortgage obligations incurred before February 15, 2020, rent payments on leases dated before February 15, 2020, and utility payments under service agreements dated before February 15, 2020, over the eight-week period following the date of the loan.

    However, not more than 25 percent of the loan forgiveness amount may be attributable to nonpayroll costs. SBA will issue additional guidance on loan forgiveness.

    While the Act provides that borrowers are eligible for forgiveness in an amount equal to the sum of payroll costs and any payments of mortgage interest, rent, and utilities, the Administrator has determined that the non-payroll portion of the forgivable loan amount should be limited to effectuate the core purpose of the statute and ensure finite program resources are devoted primarily to payroll. The Administrator has determined in consultation with the Secretary that 75 percent is an appropriate percentage in light of the Act's overarching focus on keeping workers paid and employed. Further, the Administrator and the Secretary believe that applying this threshold to loan forgiveness is consistent with the structure of the Act, which provides a loan amount 75 percent of which is equivalent to eight weeks of payroll (8 weeks / 2.5 months = 56 days / 76 days = 74 percent rounded up to 75 percent). Limiting non-payroll costs to 25 percent of the forgiveness amount will align these elements of the program, and will also help to ensure that the finite appropriations available for PPP loan forgiveness are directed toward payroll protection. SBA will issue additional guidance on loan forgiveness.

  • What Documentation do I Retain and Submit to Obtain Loan Forgiveness?

    Borrowers must submit such documentation as is necessary to establish eligibility such as payroll processor records, payroll tax filings, or Form 1099-MISC, or income and expenses from a sole proprietorship. 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.

    Documentation verifying the number of full-time equivalent employees on payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight-week period following this loan will be provided to the lender.

    Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. As explained above, not more than 25 percent of the forgiven amount may be for non-payroll costs.

  • How can PPP Loans be used by Self-Employed Individuals who File a 2019 Form 1040, Schedule C?

    The proceeds of a PPP loan are to be used for the following:
    a. Owner compensation replacement, calculated based on 2019 net profit.
    b. Employee payroll costs (as defined in the First PPP Interim Final Rule) for employees whose principal place of residence is in the United States, if you have employees.
    c. Mortgage interest payments (but not mortgage prepayments or principal payments) on any business mortgage obligation on real or personal property, business rent payments, and business utility payments. You must have claimed, or be entitled to claim a deduction for such expenses on your 2019 Form 1040 Schedule C for them to be permissible use during the eight-week period following the first disbursement of the loan (the "covered period"). For example, if you did not claim or an not entitled to claim utilities expenses on your 2019 Form 1040 Schedule C, you cannot use the proceeds for utilities expenses during the covered period.
    d. Interest payments on any other debt obligations that were incurred before February 15, 2020.
    e. Refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020 (maturity will be reset to PPP's maturity of two years). If you received an SBA EIDL loan from January 31, 2020 through April 3, 2020, you can apply for a PPP loan. If your EIDL loan was not used for payroll costs, it does not affect your eligibility for a PPP loan. If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan. Proceeds from any advance up to $10,000 on the EIDL loan will be deducted from the loan forgiveness amount on the PPP loans.

    For individuals with income from self-employment from 2019 for which they have filed or will file a 2019 Form 1040 Schedule C, expenses incurred between January 1, 2020 and February 14, 2020 may not be considered because of the lack of verifiable documentation on expenses in this period.

    SBA will issue additional guidance for those individuals with self-employment income who:(1)were not in operation in 2019 but who were in operation on February 15, 2020 and (2)will file a Form 1040 Schedule C for 2020.

  • What Loan Amounts Shall be Eligible for Forgiveness for Self-Employed Individuals?

    The amount of loan forgiveness can be up to the full principal amount of the loan plus accrued interest. The actual amount of loan forgiveness will depend, in part, on the total amount spent over the covered period on:
    a. payroll costs including salary, wages, and tips, up to $100,000 of annualized pay per employee (for eight weeks, a maximum of $15,358 per individual), as well as covered benefits for employees (but not owners), including health care expenses, retirement contributions, and state taxes imposed on emplyee payroll paid by the employer (such as unemployment insurance premiums).
    b. owner compensation replacement, calculated based on 2019 net profit, with forgiveness of such amounts limited to eight weeks' worth (8/52) of 2019 net profit, but excluding any qualified sick leave equivalent amount for which a credit is claimed under section 7002 of the Families First Coronavirus Response Act (FFCRA)(Public Law 116-127) or qualified family leave equivalent amount for which a credit is claimed under section 7004 of FFCRA.
    c. payments of interest on mortgage obligations on real or personal property incurred before February 15, 2020, to the extent that they are deductible on Form 1040 Schedule C (business mortgage payments).
    d. rent payments on lease agreements in force before February 15, 2020, to the extent they are deductible of Form 1040 Schedule C (business rent payments).
    e. utility payments under service agreements dated before February 15, 2020 to the extent they are deductible on Form 1040 Schedule C (business utility payments).

  • What Documentation Should Self-Employed Individuals Retain for Loan Forgiveness?

    Self-employed individuals must provide their 2019 Form 1040 Schedule C and a 2019 IRS Form 1099-MISC detailing nonemployee compensation received (bx 7), invoice, bank statement, or book of record that establishes you are self-employed. You must provide a 2020 invoice, bank statement, or book of record to establish you were in operation on or around February 15, 2020.

    In addition to the borrower certification required by Section 1106(e)(3) of the Act, to substantiate your request for loan forgiveness, if you have employees, you should submit Form 941 and state quarterly wage unemployment insurance tax reporting formas or equivalent payroll processor records that best correspond to the covered period (with evidence of any retirment and health insurance contributions). Whether or not you have employees, you must submit evidence of business rent, business mortgage interest payments on real or personal property, or business utility payments during the covered period if you used loan proceeds for those purposes.

  • What Happens if PPP Loan Funds are Misused?

    If you use PPP funds for unauthorized purposes, SBA will direct you to repay those amounts. If you knowingly use the funds for unauthorized purposes, you will be subject to additional liabilility such as charges for fraud. If one of your shareholders, members, or partners uses PPP funds for unauthorized purposes, SBA will have recourse against the shareholder, member, or partner for the unauthorized use.

    Knowingly making a false statement to obtain a guaranteed loan from SBA is punishable under the law, including under 18 USC 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to $250,000; under 15 USC 645 by imprisonment of not more than two years and/or a fine of not more than $5,000; and, if submitted to a federally insured institution, under 18 USC 1014 by imprisonment of not more than thirty years and.or as fine of not more than $1,000,000.

*Restrictions may apply. Please refer to www.sba.gov for details. For complete details, please read, download and save the SBA’s Frequently Asked Questions about PPP Loans.