PPP Loan Support
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Paycheck Protection Program (PPP) Update
Current as of 3/30/2021
The following is a description of recent significant events and developments regarding PPP laws and regulations. We are committed and available to supporting our clients’ business and banking needs through the challenges that COVID-19 creates and in maximizing the PPP. Please contact your Banking Officer if you are interested in pursuing an application.
Enactment of the Coronavirus Response and Relief Act on December 27, 2020
On December 27, 2020, the Coronavirus Response and Relief Act (CRRA) was enacted. The CRRA provided additional funding for PPP loans to small businesses which had never applied for or obtained an PPP loan before (“First Draw Loans”) as well as to small business which had obtained a PPP loan before (“Second Draw Loans”). The following are links to the Small Business Administration (SBA) website which provide helpful and easy to understand information about First Draw and Second Draw PPP Loans.
PPP Interim Final Rule Published on March 3, 2021
On March 3, 2021, the SBA published an Interim Final PPP Rule (IFR) titled “Business Loan Program Temporary Changes; Paycheck Protection Program — Revisions to Loan Amount Calculation and Eligibility.”
This new IFR:
- Revises the maximum loan calculations for Sole Proprietors who file Schedule C returns;
- Provides new Application Forms that have been developed for Schedule C filers;
- Provides how PPP loan proceeds are to be used by Schedule C filers;
- Places a limitation on the PPP “safe harbor” rules regarding PPP loan necessity; and
- Expands PPP eligibility to certain borrowers.
SOLE PROPRIETORS MAY NOW USE “GROSS INCOME” TO CALCULATE MAXIMUM PPP LOAN AMOUNTS
Under prior PPP rules, the maximum PPP loan amount which could be obtained by a Sole Proprietor filing a 1040, Schedule C return was based on a calculation method using the borrower’s “net profit”. For borrowers with little or no net profit, the maximum PPP loan amount was very small or nothing.
The IFR changed this to allow Schedule C filers with no employees to use a calculation method which is based on its “gross income” on Line 7 of its Schedule C to determine its maximum PPP loan amount.
For Schedule C filers with employees, the IFR provides that they may also use their Schedule C “gross income” to calculate their maximum PPP loan amount, but they must subtract from this “gross income” amount all expenses reported on lines 14 (employee benefit programs), 19 (pension and profit-sharing plans), and 26 (wages less employment credits) of Schedule C as part of this calculation.
This change in the IFR is applicable to PPP loans that are approved after the effective date of this rule (March 4, 2021). Borrowers whose PPP loans were approved on or before this date may not increase their PPP loan amount based on this new calculation methodology.
USE OF PPP LOAN PROCEEDS BY SCHEDULE C FILERS
The IFR also describes how PPP loan proceeds are to be used by Schedule C filers. Specifically, it provides that Schedule C filers are to use their PPP proceeds to pay:
- Owner compensation (if net profit is used) or proprietor expenses (business expenses plus owner compensation if gross income used);
- Employee payroll costs;
- Mortgage interest payments, Business rent payments, and Business utility payments provided they are claimed or entitled to be claimed as deductions on Schedule C;
- Interest payments on any other debt incurred before Feb. 15, 2020. (However, the IFR states that these payments are not eligible for PPP loan forgiveness);
- Covered Operations Expenditures, Covered Property Damage Costs, Covered Supplier Costs, and Covered Worker Protection Expenditures, as defined in Section 7A(a) of the Small Business Act, but only to the extent they are deductible on Schedule C; and
- Refinancing an EIDL loan made between January 31, 2020 and April 3, 2020.
For more detailed information about this IFR including a step-by-step description of how to calculate the maximum PPP loan amount for a Schedule C filer, download this PDF: https://home.treasury.gov/system/files/136/PPP-IFR-Loan-Amount-Calculation-and-Eligibility.pdf
Enactment of the “American Rescue Plan Act of 2021” on March 11, 2021
On March 11, 2021, the American Rescue Plan Act of 2021 (“ARPA”) was enacted. Although ARPA contains provisions relating to PPP loans, its changes or additions to the PPP loan laws are limited.
Under its PPP provisions, ARPA makes more nonprofits eligible for PPP loans by creating a new category called "additional covered nonprofit entity," which are those nonprofits listed in Sec. 501(c) of the Internal Revenue Code other than 501(c)(3), 501(c)(4), 501(c)(6), or 501(c)(19) organizations, that can receive an initial PPP loan, provided that the organization does not employ more than 300 employees and meets certain restrictions on lobbying activities as specifically described in ARPA.
Under ARPA, the eligibility of nonprofits for PPP loans was also expanded to include:
- 501(c)(3) organizations and veterans organizations that employ 500 employees or less per physical location, and
- 501(c)(6) organizations, domestic marketing organizations, and additional covered not-for-profit entities that employ 300 employees or less per physical location.
ACT EXTENDING THE DEADLINE FOR PPP LOAN APPLICATIONS
On March 30, 2021, the “PPP Extension Act of 2021” was enacted which extends the deadline to submit PPP loan applications from March 31, 2021 to May 31, 2021.
The PPP Forgiveness Process
At American National Bank, we’ve developed a proprietary forgiveness tool that makes the PPP forgiveness process easier for our clients. If your banker hasn’t reached out to you already, please contact them to get the process started today.
As you move forward through this process, we encourage you to regularly visit the SBA website and U.S. Treasury website, and watch this video of American National Bank President, Jason Hansen, as he shares his thoughts on PPP Forgiveness.
PPP Forgiveness Resources
Below you’ll find links to various other resources on the process. We ask that you read these documents and articles as you work with your banker through the forgiveness process.
SBA PPP Loan Forgiveness Overview
PPP Forgiveness Process Update (as of 10.08.2020)
SBA Frequently Asked Questions About the PPP Process (updated regularly)
Treasury PPP Fact Sheet
About the Process
Supporting documents are needed for permissible expenses. Unless your PPP loan was $150,000 or less, these supporting documents are required at time of application and will be reviewed by ANB.
The SBA has three forms 3508, 3508EZ, and 3508S. Please consult your legal counsel and/or accounting professionals, in addition to your banker, for assistance in determining which form is needed for forgiveness on your loan. All of these forms are available within ANB’s proprietary forgiveness tool.
The SBA is allowed 90 days to make their decision after the bank submits the completed application. ANB will communicate with clients during the process as the applications move through the SBA queue.
Support For All
Important message regarding COVID-19 preparedness at American National Bank:
American National Bank has been, and will continue to, actively monitor developments regarding the potential spread, and impact of the coronavirus with guidance from relevant authorities, including the Centers for Disease Control and Prevention (CDC), World Health Organization and U.S., state and local government entities. We feel it is imperative to limit face-to-face interaction until we have assurances from our local health departments that the virus is contained with no further risk of community-related spread.
American National Bank thanks you for your understanding and patience during this unprecedented time. We appreciate the trust you place in us and want you to know that the health and safety of our clients and employees is our top priority. We view the implementation of this change in access as part of our contribution to maintaining a strong and healthy community.
We remain committed to providing the highest level of service with multiple layers of protection for our most important assets: our people, information security and cash flow. Below, you’ll find information regarding our operations during this time. Please contact a branch, your banker, or our customer service line if you have any questions.
If you're experiencing financial hardship, please visit this page for help
Branch Lobbies are Closed,
Drive Thrus are Open
Our branch lobbies are closed to unscheduled walk-in traffic with the exception of select branches in the Southeastern Nebraska community. Please check our locations page for the latest updates and see below for current precautions in place:
- For safety, all other lobbies remain closed to unscheduled walk-in traffic.
Appointments are welcome and encouraged.
- Drive thru service is open an encouraged.
- Mobile banking is there when you need it.
The following lobbies are open in Nebraska:
- Humboldt (707 4th St.)
Mobile and Online Banking Services
Services will be fully available via our mobile and online platforms*, as well as from our drive-thru windows, Teller Connect**, and ATMs. Please check the ‘Locations’ tab for access points nearest to you.
Download our mobile apps‡ here:
*Need to enroll in online banking? Visit our online banking enrollment page for more information.
**Only available in Nebraska/Iowa
‡If you bank with us in Minnesota, please visit this page for more information on your mobile banking app.
In the event you need to meet in person, we invite you to contact your local branch or banker or click here to make an appointment. We request that you follow the CDC guidelines of self-screening to personally evaluate yourself to determine if you could be at risk by exhibiting any of the symptoms related to the virus. Visit www.cdc.gov for more information.