Paycheck Protection Program Loan Guidance

Valley Strong Credit Union is ready to assist local businesses with applying for relief funds from the Small Business Administration.

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Important Notice: SBA Approved 1st and 2nd draw loans will be funded to a Valley Strong Credit Union Business Account. If your business does not currently have accounts, you will need to open the following accounts with opening deposits before your approved loan can be funded:

• Business Share Savings - $5
• Basic Business Checking - $100

For more information on Valley Strong's business accounts click here. 

Application Information:

Note to Previous PPP Loan Recipients - All loans from your previously received Valley Strong PPP loan will populate in the new application portal. You do not need to know your previous loan number.

For first-draw loan applicants, additional payroll cost support documents in pdf format will also be required as follows:

The SBA ruling explains that generally, the same documentation as required for First Draw PPP loans is required to substantiate a Second Draw applicant's payroll cost calculations. However, if the applicant uses the same lender and uses calendar year 2019 figures to determine both its First-Draw and Second-Draw PPP loans, then no additional documentation is required. However, the Valley Strong may independently request additional documentation if we conclude that the documentation would be useful in conducting the good-faith review of the borrower's loan amount calculation. For loans with a principal amount of $150,000 or more, the applicant must also submit documentation adequate to establish that the applicant experienced a revenue reduction of 25% or more in 2020 relative to 2019. For loans with a principal amount of $150,000 or less, documentation is not required at the time of application and can be provided with the forgiveness application.

Supporting documents will be as follows:

• IRS Forms 941 for 2019 or 2020
• IRS Form 940 for the year ended 12/31/19 OR
• Payroll Reports:
  • Summary report for the 12 months ending 2019 (gross wages prior to Section 125 or Deductions)
  • Report detailing each employee and their gross pay for the 12 months ending 2019 or 2020 (totals should agree with summary report)
  • Report detailing vacation, severance pay, group health benefits, retirement benefits, etc… AND
• IRS Forms W-2, W-3 for 2019 or 2020 (REQUIRED)

Revenue reduction supporting documentation may include:

• 2019 and 2020 filed tax forms or
• 2019 and 2020 quarterly financial statements or
• 2019 and 2020 bank statements

Support of the following:

• Supporting documentation for health, dental, and retirement benefits paid for calendar 2019.
  • A schedule summarizing each category of these costs.
• Copies of state unemployment tax filings for 2019.

For independent contractors and self-employed individuals:

Support of the payroll costs from the following:
2019 or 2020 Schedule C Form 1040
2019 or 2020 Form 1099's

To gather needed information before beginning the application, please view the following PDF sample applications: 

- First-Draw borrower sample application (PDF)

- Second-Draw borrower sample application (PDF)

We have partnered with an experienced SBA loan service provider that is assisting us to create a smooth process that will expedite loan approvals.

Your patience and understanding is appreciated as we work through developing a smooth process that is changing daily. At Valley Strong Credit Union, our goal is to work together with you to navigate these unchartered waters.

What we know about the 2021 SBA Paycheck Protection Program (PPP):

Who Is Eligible: 

• First-Draw PPP loans are available to small businesses, certain nonprofit organizations, veterans organizations, and tribal business concerns with fewer than 500 employees or the NAICS size standard for that industry (whichever is greater).
• Second-Draw PPP loans are available to small businesses who employ no more than 300 employees and demonstrate a 25% reduction in gross receipts in the first, second or third quarter in 2020 compared to the same quarter in 2019. 

Maximum Loan Amount:

Restaurant and hospitality industries with a NAICS code beginning with 72: 3.5x the average monthly payroll costs or $10 million for first-time loans/$2 million for second-time loans, whichever is less.

For all other eligible small business types: 2.5x the average monthly payroll costs or $10 million for first-time loans/$2 million for second-time loans, whichever is less.

• Small businesses will use their previous 12-month payroll costs to determine an average monthly payroll cost.
• Sole proprietors or independent contractors will use the sum of payments that is a wage, commission, income, net earnings from self-employment, or similar and that is not more than $100,000 in one year.
• If the business is determined to be a seasonal employer by the administrator, the average total monthly payments for payroll shall be for any 12-week period between February 15, 2019 and February 15, 2020, as chosen by the PPP borrower. 
• Businesses not in operation in 2019 will use average monthly payroll from January 1, 2020 – February 29, 2020.
• This loan has a maturity of up to 5 years and an interest rate of 1%.

Eligible Payroll Costs Includes:

• Salary, wages, commission, or similar compensation;
• Payment of cash tip or equivalent;
• Payment for vacation, parental, family, medical, or sick leave;
• Allowance for dismissal or separation;
• Payment for group health care benefits, including insurance premiums;
• Payment of any retirement benefit; and
• Payment of State or Local tax accessed on the compensation of employees.

Additional Eligible Costs Include:

• Covered Operations Expenditures: payment for any business software or cloud computing services that facilitates business operations, product or service delivery, payroll processing, human resources, sales and billing functions or accounting for supplies, inventory, records and expenses;
• Covered Supplier Costs: supplier costs which are essential to operations or made pursuant to a contract in effect at the time of the PPP loan;
• Covered Worker Protection Expenditures: operating or capital expenditures made to comply with requirements or guidance published by the Department of Health and Human Services, the Centers for Disease Control, Occupational Safety and Health Administration, or any state equivalent from March 1, 2020 until the determination by the President of the end of the national emergency related to COVID-19
• Certain Group Insurance Payments: group life, disability, vision and dental insurance benefits.
• Compensation for any employee in excess of an annual salary over $100k, prorated for the covered period (Note: you can include their compensation up to a $100k cap);
• Taxes imposed or withheld under chapters 21, 22, or 24 of IRS Code during the covered period;
• Compensation for any employee whose principal residence is outside USA;
• Qualified sick and/or family leave wages, for which a credit is allowed under Families First Coronavirus Response Act.

Loan Forgiveness:

There is a portion of the CARES Act that has “Loan Forgiveness.”  These “eligible costs” include payroll costs, rent, and mortgage interest payment, utilities (electricity, gas, water, transportation, and telephone or internet access). Please know, correct documentation of your eligible cost are necessary to receive any loan forgiveness. Valley Strong will provide borrowers a link to apply for loan forgiveness through our online platform. Borrowers may apply for loan forgiveness after the covered period and when funds have been fully utilized. For additional assistance, please contact our Business Department at (661) 833-7530.

Our team is ready to assist you with the loan process to help your business apply for relief funds.

To learn more about choosing the right program for your business, and the most current update to date program information, visit the Small Business Administration’s website at https://www.sba.gov/funding-programs/loans/coronavirus-relief-options .