Paycheck Protection Program (PPP)

Important Update 

The SBA is expected to re-open its E-Tran system Monday morning, April 27th.  We will begin processing applications accordingly.  While we cannot guarantee participation in the program, you may still access and complete our PPP Packet, which includes instructions, a documentation checklist, and the loan application, as well as other important information.  When submitting your packet electronically, please submit it in PDF format if possible.  If you are an independent contractor or sole proprietorship, please contact your Independent Bank account officer for further details on the Paycheck Protection Program.

We have outlined our interpretation of the program below, but it is subject to change.  For more information, we are providing you with links to the following information at the US Treasury website:

Top line overview of the program

Borrower Information Form

Interim Final Rule

Interim Final Rule for Affiliations

Affiliation Rules



Elements of the program as of 4/3/2020

The federal government has allocated $349 billion to help small business keep their workers employed during the current economic downturn.  The Paycheck Protection Program (PPP) offers 100% guaranteed loans through the Small Business Administration (SBA). Independent Bank is an authorized SBA lender and may be able to help your business access these funds.  

Who is eligible?

Any small business, 501(c)(3), sole proprietor, independent contractor, or self-employed individual is eligible to apply provided your business:

  • employs fewer than 500 employees (or that otherwise meets the SBA's size standard)*
  • can attest that current economic conditions make the loan request necessary to maintain ongoing operations
  • will use the loan proceeds to retain workers and maintain payroll or make mortgage, lease, and utility payments

How much can I borrow?

Loans can be up to 2.5 x the borrower’s average monthly payroll costs, not to exceed $10 million.  If you are a seasonal or new business, you will use different applicable time periods for your calculation. Payroll costs will be capped at $100,000 annualized for each employee.

How do I calculate payroll costs?

Payroll costs should include:

  • salary, wage, commission, net earnings from self-employment, or similar compensation;
  • payment of cash tip or equivalent;
  • payment for vacation, parental, family, medical, or sick leave
  • allowance for dismissal or separation
  • payment required for the provisions of group health care benefits, including insurance premiums
  • payment of any retirement benefit
  • payment of state or local tax assessed on the compensation of the employee

Payroll costs should NOT include:

  • Compensation of an individual employee in excess of an annual salary of $100,000, as prorated for the period February 15, to June 30, 2020
  • Payroll taxes, railroad retirement taxes, and income taxes
  • Any compensation of an employee whose principal place of residence is outside of the United States
  • Qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (Public Law 116–5 127); or qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act

What are the terms of the loan?

  • 2-year loan
  • Payments deferred for 6 months
  • 1.00% fixed interest rate
  • No collateral or personal guarantee required
  • No requirement that the borrower was unable to obtain credit elsewhere.
  • No prepayment penalty

Will this loan be forgiven?

A borrower is eligible for loan forgiveness equal to the amount the borrower spent on the following items during the 8-week period beginning on the date of the origination of the loan:

  • Payroll costs
  • Interest on a covered mortgage obligation
  • Rent on a leasing agreement
  • Payments on utilities (electricity, gas, water, transportation, telephone, or internet)

Important Notes:

  • The government is now advising that because of high participation, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
  • The loan forgiveness cannot exceed the principal.
  • The amount of loan forgiveness calculated above is reduced if there is a reduction in the number of employees or a reduction of greater than 25% in wages paid to employees.
  • Reductions in employment or wages that occur between February 15, 2020 and April 26, 2020 (as compared to February 15, 2020) shall not reduce the amount of loan forgiveness IF by June 30, 2020 the borrower eliminates the reduction in employees or reduction in wages.