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Apply now to access the $349 billion in federal funding to help small businesses keep workers employed amid the pandemic and economic downturn. You do not have to be an existing OVB customer to apply. 

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Already have your loan? Let's talk forgiveness...

Obtaining the loan is just the first step—next you will prepare your application for forgiveness. As the PPP dictates, loan amounts will be forgiven as long as:

  • The loan proceeds are used to cover payroll costs, and most mortgage interest, rent and utility costs over the 8-week period after the loan is made; and
  • Employee and compensation levels are maintained.

Payroll costs are capped at $100,000 on an annualized basis for each employee.  Additionally, not more than 25% of the forgiven amount may be for non-payroll costs.

Funds from your PPP loan can be used for the following purposes:

  • Payroll—salary, wage, vacation, parental, family, medical, or sick leave, health benefits
  • Mortgage interest—as long as the mortgage was signed before February 15, 2020
  • Rent—as long as the lease agreement was in effect before February 15, 2020
  • Utilities—as long as service began before February 15, 2020

All expenses falling under these categories are eligible for loan forgiveness. But you must begin preparing now for your loan forgiveness application.  The following is a general breakdown of how you can begin this process during your 8-week period.

 
8-Weeks of Coverage
  • Eligible expenses are only those incurred during your 8-week period, which starts the date Ohio Valley Bank made your first disbursement of the loan.
  • Note: This may not necessarily be the date on which you signed the [loan agreement, promissory note, etc.]
  • Consider your payroll schedule. You may want to adjust the timing of your payroll date to accommodate as many payroll cycles as possible.
 
The 75%/25% Rule
  • At least 75% of your PPP loan funds must be used for payroll costs.
  • No more than 25% of your PPP funds can be used for non-payroll purposes.
  • Payments to independent contractors are not included in your payroll costs.
  • Remember! The following payroll costs are not eligible for loan forgiveness but you should be keeping track of these:
    • Payments to an independent contractor
    • Cash compensation in excess of $100,000
    • The employer’s share of federal payroll taxes
    • Qualified sick leave and qualified parental leave wages for which credit is allowed under the Families First Coronavirus Response Act (FFCRA)
 
Review your staffing requirements
  • To receive your highest loan forgiveness, you must maintain the number of employees on your payroll.
  • If you are Self-Employed:
    • 8-weeks of your 2019 net profit will be eligible for loan forgiveness.
    • Mortgage interest, rent and/or utilities expenses must have been claimed or are entitled to be claimed as a deduction on your 2019 Form 1040 Schedule C to qualify for loan forgiveness.
 
Keep a thorough, running list of all documentation that will need to be submitted by you to Ohio Valley Bank for a complete loan forgiveness application. Items may include the following:
  • Documents verifying your number of FTEs on payroll and their pay rates for the periods used to verify you’ve met the staffing and pay requirements:
    • Payroll reports from your payroll provider
    • Payroll tax filings (Form 941)
    • Documents verifying any retirement and/or health insurance contributions
    • Income, payroll, and unemployment insurance filings from your State.
  • Documents verifying your eligible interest, rent, and/or utility payments including but not limited to:
    • Cancelled checks
    • Payment receipts
    • Account statements

A successful forgiveness application is going to require good recordkeeping and bookkeeping in order to maximize your loan forgiveness amount.  Keep diligent track of all eligible expenses and their accompanying documentation for this 8-week period. As we near the forgiveness period, Ohio Valley Bank will you be contacting you with additional information on how to submit your forgiveness application. It is recommended that you consult with your tax advisor, legal counsel, or a bookkeeping service to assist your business if necessary.

Any outstanding balance not forgiven will continue to accrue interest at 1% for the remainder of your 2-year loan term period.  Generally, there is no prepayment penalty and you can pay off that outstanding balance at any time with no additional fees.

For additional information, please refer to the U.S. Department of the Treasury’s CARES Act Assistance for Small Businesses webpage.  Additional guidance is anticipated from the Treasury and the U.S. Small Business Administration in the coming weeks.

Your local Ohio Valley Bank branch is here to assist you with your PPP loan should you have any other questions. Call us at 1-800-468-6682 or email callcenter@ovbc.com.