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CARES Act Paycheck Protection Program Quick Reference Guide Member FDIC 20-0138 / rev 032920 Timing is of the essence! Get prepared now to apply for federal relief loans. Be proactive to ensure you’re at the front of the line for business assistance loans recently approved by Congress under the Paycheck Protection Program. We are here to help you and your business at this critical time. Key components of the program: • Loans available up to $10 million • Small and mid-sized companies impacted by coronavirus are eligible • Funds may be used for operating expenses including payroll, rent, mortgage, utilities • Full loan forgiveness available • No personal guarantees • No collateral requirements • Low fixed rate Included in this quick reference guide are questions you may be asking about the Coronavirus Aid, Relief, and Economic Security (CARES) Act which allocates $350 billion for assistance to small and mid-sized businesses. Your City National Banker is just a phone call away or call us at 1-800-435-8839. This document is based on the latest information available as of March 29, 2020. Final details of the program are still pending from the SBA. This information is not considered legal or accounting advice. Personal Relationships Local Decisions Stability citynational.com GD20-0060 AssistanceFAQsV2.indd 1 3/29/20 1:18 PM Member FDIC 20-0138 / rev 032920 The $2 trillion Coronavirus Aid, Relief, and Economic Security Act can be difficult to interpret. Below, we break down the Paycheck Protection Program and address questions you are likely to have. Please remember to consult with your lawyer or CPA for further guidance. SBA Stimulus Q & A Do I qualify for a loan? Small businesses with fewer than 500 employees (or the maximum number of employees specified in the current SBA size standards) that have paid payroll and payroll taxes or filed 1099-misc(s) for contractors prior to March 1, 2020 are eligible. What types of loans may I apply for? You may apply for CARES Act 7 (a) Paycheck Protection Program or SBA 7 (a) loan with forgiveness and cancellation for eligible expenses. What are the benefits of this loan? The eligible expenses you pay during the first eight weeks following the loan’s origination will be forgiven and canceled. Where should I get this loan? We invite you to reach out to your City National Bank of Florida banker. We are well positioned, prepared, and especially eager to be of assistance during these uncertain times. How much of a loan am I eligible for? Loans are capped at 2.5 times your average monthly payroll, including 1099 contractors; and there is a maximum loan amount of $10 million. How do I figure out the correct numbers and are there caveats? How do I figure out the correct numbers and are there caveats? W2 employees: Run a transaction detail report for the previous 12-month period. Remove the following: • Company-paid federal taxes • Employee-paid federal taxes • Employee-paid withholding taxes • Federal unemployment tax Note: Calculate salaries over $100,000 per year at no more than $8,333.33 per month 1099 contractors: Using QuickBooks or a comparable program, run a detailed 1099-transaction report for the previous 12-month period. • Count only independent contractors or sole proprietors to whom you sent Misc-1099 forms for 2019. • Use only the amount paid in wages, commissions, etc. Goods should not be included. EXAMPLE Personal Relationships Local Decisions Stability citynational.com ELIGIBLE LOAN 12 MONTHS AVG. MO. x2.5 W2 Payroll (see exceptions) $600,000 $50,000 $125,000 1099 Payroll (see exceptions) $150,000 $12,500 $31,125 TOTALS $750,000 $62,500 $156,250 GD20-0060 AssistanceFAQsV2.indd 2 3/29/20 1:18 PM Member FDIC 20-0138 / rev 032920 It is essential that you gather and present your financial information in a format that clearly demonstrates how you arrived at the numbers you are submitting. What can the loan be used for? The loan can be used to cover payroll, mortgage interest, rent and utility expenses between February 15, 2020 and June 30, 2020. EXAMPLE Is there any portion of the loan that will be forgiven or cancelled? It’s worth noting that only expenses paid in the first eight weeks following the loan’s origination may be eligible for forgiveness and cancellation. Accordingly, during this eight-week period it is particularly important to thoroughly log eligible expenses such as payroll, mortgage interest, rent, energy, water, telephone, internet and transportation. EXAMPLE Preliminary Checklist for Paycheck Protection Program: • 2019 Business Tax Returns or Year End Financial Statements as of 12/31/19 • 2019 Payroll Cost and YTD Payroll Cost through February 15, 2020 • Number of employees as of December 31, 2019 • Number of employees as of February 15, 2020 • What industry does the business fall under? Payroll Expense Verification Documents to Include: • IRS Form 940 Employers Annual Federal Unemployment Tax Return (FUTA) • IRS Form 941 Employer’s QUARTERLY Federal Tax Return • Payroll Summary Report 2019 with corresponding bank statements o W2 Summary o 1099 Summary • Breakdown of payroll benefits (vacation, allowance for dismissal, group healthcare benefits, retirement benefits, etc.) • Copy of 2019 1099s (if Independent Contractor) • Copy of 2019 W2s for wage earners • Trailing twelve-month profit and loss statement (as of the date of application) for all applicants In these times of uncertainty, your City National bankers are ready to lend a helping hand. Once you gather your paperwork, we can hit the ground running. Please don’t delay. Beat the clock. Start today. Prepare for tomorrow. *This is based on the latest information available as of March 29, 2020. Final details of the program are still pending from the SBA. This information is not considered legal or accounting advice. Personal Relationships Local Decisions Stability citynational.com ELIGIBLE EXPENSES FEB 15-29 MARCH APRIL MAY JUNE TOTAL W2 Payroll (see exceptions) $25,000 $50,000 $50,000 $50,000 $50,000 $225,000 1099 Payroll (see exceptions) $12,500 $25,000 $25,000 $25,000 $25,000 $112,500 Corporate Mortgage Interest $834 $1,667 $1,667 $1,667 $1,667 $7,502 Rents $1,250 $2,500 $2,500 $2,500 $2,500 $11,250 Utilities $1,042 $2,500 $2,083 $2,083 $2,083 $9,374 Totals $40,625 $81,250 $81,250 $81,250 $81,250 $365,625 ELIGIBLE EXPENSES WK 1 WK 2 WK 3 WK 4 WK 5 WK 6 WK 7 WK 8 TOTAL W2 Payroll (see exceptions) $25,000 $25,000 $25,000 $25,000 $100,000 1099 Payroll (see exceptions) $12,500 $12,500 $25,000 Corporate Mortgage Interest $1,667 $1,667 $3,3354 Rents $2,500 $2,500 $5,000 Utilities $2,083 $2,083 $4,166 Totals $137,500 GD20-0060 AssistanceFAQsV2.indd 3 3/29/20 1:18 PM
