What Businesses Need to Know About the CARES Act
Centric Bank is here for Small Business.
Paycheck Protection Program (PPP)
On July 4, 2020, new legislation was signed into law which extends the deadline for PPP loan approvals to August 8, 2020. Centric Bank stands ready to begin the application process for our customers, as well as small businesses and non-profits in our community service area. Please contact your nearest Centric Bank financial center, complete our brief inquiry form, or call us at 888.274.2033 by August 4. We will then provide details on our loan application process. We are servicing applications from businesses in our services areas of Central Pennsylvania, Philadelphia and Suburban Philadelphia, Southern New Jersey and Cherry Hill, New Jersey.
PPP Loan Forgiveness
At Centric Bank our goal is to supply our clients with all the tools you need to complete your PPP loan forgiveness application. We are awaiting further operational details from the Small Business Administration (SBA) and will communicate that information to our PPP loan clients as soon as we are able. Our team is working diligently to develop a new portal for forgiveness applications, with integrated logic to calculate your qualifying forgiveness amount and automated completion of SBA forms.
Please review our PPP Forgiveness Guidelines for further information about the process.
The latest guidance on PPP loan forgiveness from the SBA may be found at the links below. As further details become available from the SBA, we will share that information directly with businesses who have a PPP loan funded through Centric Bank.
PPP Flexibility Act
On June 5, 2020, the Paycheck Protection Program Flexibility Act of 2020 was signed into law, which brings an extension of the eight-week period under which PPP loan recipients can spend their funds, as well as making some of the loan terms more favorable for businesses. Key highlights of the Act include:
- Extension of the covered period from 8 weeks to 24 weeks under which small businesses can spend their loan proceeds.
- Expansion of the 25% cap on non-payroll expenses (rent, mortgage interest and utilities) to 40% of the total loan. The 75% requirement for payroll expenses is then lowered to 60% for maximum forgiveness.
- Removal of limits on loan forgiveness for businesses that were unable to rehire employees, hire new employees or return to pre-pandemic levels of business activity.
- Allows small businesses to qualify for a separate, recently enacted tax credit to defer payroll taxes, even if they’ve also taken a PPP loan.
- Extension of the loan terms for any unforgiven portions from two years to five years, at 1% interest.
- Offers small businesses more time to rehire employees or to obtain forgiveness for the loan if CDC guidelines prevented operating at the same levels as prior to March 1.
- Deferral of PPP loan interest and principal and fees until the loan is forgiven by the lender.
Economic Injury Disaster Loans (EIDL)
The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. You may learn more and apply on the SBA’s Coronavirus (COVID-19): Small Business Guidance & Loan Resources page.
We are here to help, so please do not hesitate to contact us if you have questions. You may reach a banker at 888.274.2033, or contact your banking officer directly. You may also complete this brief inquiry form and someone will be in touch within 24 hours.