What to know about your PPP loan

The CARES Act, in creating the Paycheck Protection Program (PPP), allocated billions in relief efforts aimed at helping small businesses like yours weather the ongoing economic impacts of COVID-19. At TIAA Bank, we’re committed to supporting you through the crisis and keeping you informed of important PPP loan spending and forgiveness requirements.

Key spending dates and guidelines

The PPP Flexibility Act amended the PPP to give businesses more time to spend loan proceeds.

  • Your business now has up to 24 weeks (the “Covered Period”), or by December 31, 2020, should that occur first, to spend loan proceeds
  • Of your loan proceeds, 40% may be used for non-payroll expenses, while the remaining 60% must go to payroll costs
  • Any loan payments may be deferred for up to 10 months after the last day of your “Covered Period”

Loan forgiveness

  • All loan proceeds must be used exclusively for business-related purposes, including payroll maintenance, mortgage interest or lease payments, covered rent payments and covered utilities for the 24-week period after the loan is received
  • Again, payroll costs must account for 60% or more of your approved loan amount
Important reminder: Keep documentation of the number of full-time equivalent employees on your payroll, payroll costs, and all mortgage, rent and utility payments. Your records should include payroll dollars paid and the employment status of all full-time equivalent employees, as well as any individuals who had limited employment during the 24-week period after you received your funds.

Applying for loan forgiveness

We are now accepting applications for loan forgiveness. However, due to the possibility of congressional changes to current forgiveness guidelines, you may consider delaying the submission of your application until any pending legislation is finalized. When ready to apply, you’ll need to submit a Small Business Administration forgiveness application directly to TIAA Bank at ppploans@tiaabank.com. All applications, once fully completed and reviewed for accuracy, will be forwarded to the SBA within 60 days of their receipt, assuming no processing delays or holds are issued by the SBA.

SBA forgiveness applications and instructions

Paycheck Protection Program EZ Loan Forgiveness Application 
This application is only available if you are self-employed, an independent contractor, or sole proprietor with no employees, or any other business entity that did not reduce the annual salary or hourly wages of any employees by more than 25%. Please review the application instructions fully to ensure you meet the criteria for using this application. Application instructions

Paycheck Protection Program Loan Forgiveness Application 
This application must be used by all businesses not eligible to use the EZ Loan Forgiveness Application. Application instructions

Important note: For loans under $150K, there is pending legislation that may result in a new, more simplified forgiveness application. In light of this, it could be worthwhile to delay submitting either of the longer applications linked above. Be sure the check the SBA website periodically for the latest updates and information on applying for loan forgiveness.

When loan repayment is required

If your business lays off workers and doesn’t rehire them, reduces wages by more than 40% during the time it uses the loan, or uses the loan for expenses not defined in the bill, a portion of the loan will not be forgiven and will be expected to be repaid at a 1% interest rate over the repayment period.

Support from the SBA

Visit the SBA website for timely information and resources on PPP loan eligibility and forgiveness.