SBA Paycheck Protection Program (PPP)
The Economic Aid Act approved on December 27, 2020, included Paycheck Protection Program (PPP) Enhancements, which established three opportunities for business owners. As a SBA Preferred Lender, Central Minnesota is proud to provide access to this program for local businesses.
The Paycheck Protection Program funds are now depleted and we can no longer accept applications for new loans.
SBA PPP loans are serviced through Central Minnesota Credit Union
First Draw PPP Loans or Second Draw PPP Loans
We at Central MN Credit Union understand loan forgiveness for your recent Paycheck Protection Program (PPP) loan is important to your business.
If your loan is less than $150,000 and you would like to use a simple application for forgiveness, select “Yes” on the screen that asks if you would like to use the 3508S Application for Forgiveness.
If this application is selected, you do not need to provide CMCU any documentation as you certify that what is provided is true and correct. SBA reserves the right to audit your application at any point in time. If that happens, you will need to provide the supporting documentation to SBA. For loans of $150,000 and under, the borrower must retain records relevant to the forgiveness application submitted that prove compliance for employment records and other expenses for up to 4 years after submitting the application.
Forgiveness Application: Documentation Required
Sole Proprietorships with No Employees
Entities & Sole Proprietorships With Employees
While CMCU may have some of these documents on file, the SBA requires you, as the borrower, to supply the documents to validate your expenses.
Notes on payroll documents:
Payroll Reports should include all periods overlapping the 24-week covered period (or 8-weeks if selected), and show figures for each of the following eligible costs:
- Cash compensation;
- Employer contributions for employee health insurance;
- Employer contributions to employee retirement plans; and
- Employer state and local taxes assessed on employee compensation.
It is preferred if the report shows separate cash compensation figures for:
- Employees who received compensation at an annualized rate <=$100,000 for all pay periods in 2019; and
- Employees who received compensation at an annualized rate >$100,000 for all pay periods in 2019
[For Form 3508EZ, there is no need to separate employees by 2019 compensation level.]
This detail helps Central MN Credit Union validate the line item figures shown on the forgiveness application forms.
- Eligible cash compensation includes: gross salary, gross wages, gross tips, gross commissions, paid leave (vacation, family, medical or sick leave), and allowances for dismissal or separation. This may include bonus; hazard pay; and salaries to furloughed employees.
- Do not include compensation in excess of an annual salary of $100,000 annualized, as prorated for the covered period. Therefore, the payroll schedule should show no employee with more than $46,154 in compensation if selecting the 24-week period (or $15,385 for the 8-week period, if eligible and selected).
- Do not include payments to independent contractors, or compensation to employees whose principal place of residence is outside the US; or qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act.
Employer-paid state and local taxes assessed on employee compensation:
- Payroll reports should also show total amount paid by the borrower for employer state and local taxes assessed on employee compensation (e.g., SUI - state unemployment insurance tax).
Note on full-time equivalency (FTE):
FTE counts both full-time (FT) and part-time (PT) employees. An FT employee is counted as 1.0 FTE, and a PT employee is counted by average number of hours per week divided by 40. For example, a PT employee working 32 hours would count as 0.8 FTE. SBA also offers a simplified method that assigns all PT employees as 0.5, if that is preferable.