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STAR Paycheck Protection Program Loan Information

Our community, like so many others across the globe is in need, and the need isn’t going to go away tomorrow, or next month or even next year. It’s our mission as a community bank to build, encourage and support both our local small businesses and our neighbors, whom we know by name.

Update on PPP Applications as of 5/4/21:
The funds for the PPP program have been exhausted and STAR is no longer accepting applications.

Update on PPP Applications as of 3/5/21:
The SBA has instituted a rule change that allows borrowers that file on Schedule C to use their gross income in calculating their loan amount if they choose. The full interim final rule and applications are below and our system is ready to accept these applications.

Update on PPP Application Acceptance as of 1/27/21:
STAR Bank is participating in the new round for both First and Second Draw loans. As of January 26, 2021, our application criteria has been expanded to include customers that had an active deposit account as of December 31, 2020 for the entity that will obtain the PPP loan, or for First Draw Applicants that are willing to move their primary banking relationship to STAR. Please contact us for more details on these qualifications.

Update on PPP Application Acceptance as of 1/19/21:

STAR Financial Bank will be participating in the new round for both First and Second Draw loans. We are only accepting applications from current customers that had an active deposit account as of December 31, 2020 for the entity that will obtain the PPP loan.

All applications will be processed in the order they are received and funding under this program remains subject to SBA approval and funds availability. Links are below for the Applications for both First and Second Draw Loans and a link to the Treasury’s website where there are many other resources. Also, below are links to STAR’s loan document request checklists – please make sure to reference to make sure you submit a complete application.

Top-line overview of First Draw PPP                                       

Borrower Application Form - first draw  

Top-line overview of Second Draw PPP                                

Borrower Application Form - second draw

First Draw Application for Schedule C Filers using Gross Income

Second Draw Application for Schedule C Filers using Gross Income 

Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act

Interim Final Rule on Second Draw Loans

Interim Final Rule on Loan Amount Calculation and Eligibility


Loan Request Document Checklist:

PPP Loan Request Checklist – First Draw Loans – C and S Corporations

PPP Loan Request Checklist – First Draw Loans – Form 1040 Schedule C

PPP Loan Request Checklist – First Draw Loans – Form 1040 Schedule F

PPP Loan Request Checklist – First Draw Loans – Partnerships

PPP Loan Request Checklist – Second Draw Loans – C and S Corporations

PPP Loan Request Checklist – Second Draw Loans – Form 1040 Schedule C

PPP Loan Request Checklist – Second Draw Loans – Form 1040 Schedule F

PPP Loan Request Checklist – Second Draw Loans – Partnerships


STAR Paycheck Protection Program Loan Forgiveness

Note as of 2/1/21:

STAR’s forgiveness portal is now open again. Our loan calculator tool for Form 3508 is still under construction to align with changes in the Economic Aid Act. If you wish to file Form 3508 and have the numbers prepared, you can use option 2 below. If you need the tool, please e-mail PPPLoanForgiveness@starfinancial.com and we will let you know when it is available.

All applications need to be submitted electronically. STAR will generate a lender equivalent of the SBA forms. The SBA version will not be accepted for our process.

There are 2 options to file – if you are unsure of which form to use, start with the form selection tool. If you already have the information prepared, you can go straight to the STAR Forgiveness Application Tool below.  A list of required documentation for each form type is below.


Option 1:  I need help determining which form to use

CLICK HERE to be taken to STAR’s forgiveness form selection tool.

Once you answer the questions in this form, you will be directed to the appropriate Loan Forgiveness Calculator tool. 

Once there, download the calculator tool (you will need to right click and select download in order to access the workbook in a format that allows editing). If you are using less than 24 weeks, you can stop populating the workbook when you have entered the number of weeks in your chosen covered period. You only need to include expenses for which you are requesting forgiveness.

Save your workbook when you have filled in all information and click the link on the “Forgiveness Calc” tab – this will take you to the form that you need to complete and will allow you to include attachments. Make sure that you upload the Loan Forgiveness Calculator tool along with your other supporting documents as that will be used in preparing the application you will sign for us to submit to the SBA.

Once you submit your application, you will receive an e-mail confirmation that will outline the next steps in the process. 


Option 2:  I have all of my information prepared and wish to go straight to the application

CLICK HERE to be taken to STAR’s forgiveness application form.

Choose the third, fourth or fifth option.

Forgiveness Document Checklist:

Required Documentation for Borrowers Filing 3508 - Full Application

Required Documentation for Borrowers Filing 3508EZ

Required Documentation for Borrowers Filing 3580S


If you have questions, please email PPPLoanForgiveness@starfinancial.com.

Not receiving our e-mails about forgiveness? Fill out the form below to update your contact information for future e-mails: 


Paycheck Protection Program Flexibility Act

For a message from our Chairman & CEO, please visit our PPP Flexibility Act webpage.

Note as of June 8, 2020:
The passage of the Paycheck Protection Flexibility Act of 2020 changed the existing program. The modifications implemented the following changes:
  • Extend the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement, providing substantially greater flexibility for borrowers to qualify for loan forgiveness. Borrowers who have already received PPP loans retain the option to use an eight-week covered period.
  • Lower the requirements that 75 percent of a borrower’s loan proceeds must be used for payroll costs and that 75 percent of the loan forgiveness amount must have been spent on payroll costs during the 24-week loan forgiveness covered period to 60 percent for each of these requirements. If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.
  • Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity the business was operating at before February 15, 2020, due to compliance with requirements or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to worker or customer safety requirements related to COVID-19.
  • Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020.
  • Increase to five years the maturity of PPP loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020.
  • Extend the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period).

FAQs:
The following FAQs are being provided for informational purposes only and are not intended to provide and should not be relied on as tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors in addressing any of the matters discussed herein. Please note, the SBA guidance is subject to any changes issued in later guidance by the SBA and the Department of Treasury.
 
What is my SBA PPP Loan Number?
Your SBA Loan Number and Lender Loan Number are the same and can be found at the top left hand corner on page 2 of your Promissory Note.

What is my disbursement date?
The date your loan funds were deposited to your account.

 

How much of my loan could be forgiven?

Forgiveness is based on your use of the loan proceeds over the eight-week to twenty-four week Covered Period following your loan disbursement. A minimum of 60% of your loan needs to be for payroll costs, the remaining 40% should be used for other forgivable purposes such as rent, utilities and mortgage interest.


What is the deadline to apply for loan forgiveness?

You may submit a loan forgiveness application any time on or before the maturity date of the loan – including before the end of the covered period – if you have used all of the loan proceeds for which you are requesting forgiveness.


When will I know how much of my loan is forgiven?

You should receive a response from us within 60 days after a complete application for loan forgiveness and the supporting documentation is received. The SBA has an additional 90 days to review our request.


Where do I submit my request for loan forgiveness?

If you received your PPP loan through STAR, the Forgiveness Application and supporting documents need to be submitted through us. Please use the links at the top of the page. 


Is loan forgiveness automatic?

No. You must submit the application for Loan Forgiveness along with all supporting documentation.


What if only part of my loan is forgiven?

You will need to pay the remaining principal and interest over the remainder of the 24 or 60 month term of your loan, depending on your loan date. Principal and interest payments will start 10 months after the end of your loan forgiveness covered period.  We will notify you of the exact date.


Does interest accrue during the forgiveness application period?

Yes, interest is accruing at 1% from the date of disbursement.


What if I don’t qualify for loan forgiveness?

You will need to repay the full principal and interest balance over the remainder of the 24 or 60 month term of your loan.


May I include lease payments I make on business personal property such as business vehicles or equipment?

Yes, the current version of the Loan Forgiveness Application states that these can be included if the agreement was in force before February 15, 2020.


May I include the payment I make on a loan for my business personal property or mortgage?

No, you can only include the interest payments made during the covered period for obligations incurred before February 15, 2020 (but not any prepayment or payment of principal).


What are considered utilities?

Business utility payments for electricity, gas, water, transportation, telephone or internet access for which service began prior to February 15, 2020.


May I use loan proceeds only for payroll costs paid during the covered period or may I also use them for payroll costs incurred?

Generally, payroll costs paid or incurred during the covered period are eligible for forgiveness. Payroll costs are considered paid on the day the checks are distributed or you originate the ACH credit transaction. Payroll costs incurred during your last pay period of the covered period are eligible for forgiveness if paid on or before the next regular payroll date, otherwise they must be paid during the covered period to be eligible for forgiveness.


When is payroll considered incurred?

On the day the employee’s pay is earned (i.e., on the day the employee worked). For employees that are not performing work but are on the borrower’s payroll, payroll costs are incurred based on the schedule established (typically the date the employee would have performed work).


Are bonuses and hazard pay paid to employees during the covered period eligible for loan forgiveness? What if my employees are furloughed but I am still paying them?

Yes, according to the Interim Final Rule on Loan Forgiveness, “the CARES Act defines the term “payroll costs” broadly to include compensation in the form of salary, wages, commission, or similar compensation. If a borrower pays furloughed employees their salary, wages, or commissions during the covered period, those payments are eligible for forgiveness as long as they do not exceed an annual salary of $100,000, as prorated for the covered period.

I own the business, may I pay myself a bonus?

No, there is a cap for owner-employees that is tied to 2019 compensation.


Are there caps on the amount of loan forgiveness available for owner-employees and self-employed individuals’ own payroll compensation?

Yes.  For borrowers that received a PPP loan before June 5, 2020 and elect to use an eight-week covered period, the amount of loan forgiveness requested for owner-employees and self-employed individuals’ payroll compensation is capped at eight weeks’ worth (8/52) of 2019 compensation (i.e., approximately 15.38 percent of 2019 compensation) or $15,385 per individual, whichever is less, in total across all businesses. 

For all other borrowers, the amount of loan forgiveness requested for owner-employees and self-employed individuals’ payroll compensation is capped at 2.5 months’ worth (2.5/12) of 2019 compensation (i.e., approximately 20.83 percent of 2019 compensation) or $20,833 per individual, whichever is less, in total across all businesses.  

In particular, C-corporation owner-employees are capped by the amount of their 2019 employee cash compensation and employer retirement and health insurance contributions made on their behalf.  S-corporation owner-employees are capped by the amount of their 2019 employee cash compensation and employer retirement contributions made on their behalf, but employer health insurance contributions made on their behalf cannot be separately added because those payments are already included in their employee cash compensation. 

Schedule C or F filers are capped by the amount of their owner compensation replacement, calculated based on 2019 net profit.

General partners are capped by the amount of their 2019 net earnings from self-employment (reduced by claimed section 179 expense deduction, unreimbursed partnership expenses, and depletion from oil and gas properties) multiplied by 0.9235.  For self-employed individuals, including Schedule C or F filers and general partners, retirement and health insurance contributions are included in their net self-employment income and therefore cannot be separately added to their payroll calculation.

 
 Forgiveness is not automatic and is subject to all terms and criteria contained in the SBA interim final rule(s) and program guidance.

 

 

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