Frequently Asked Questions

FREQUENTLY ASKED QUESTIONS

Find answers and guidance to questions related to COVID-19, Firstrust Bank, and your finances.

For additional FAQs, visit the Treasury's website.

First Draw PPP Loan FAQs

What is a First Draw PPP loan?

It is an extension of the Paycheck Protection Program (PPP) loan for eligible business owners who did not get a PPP loan during the first round that ended August 8, 2020. 

First Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations. 

What are the First Draw PPP full forgiveness terms?

First Draw PPP loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement: 

• Employee and compensation levels are maintained; 

• The loan proceeds are spent on payroll costs and other eligible expenses; and 

• At least 60 percent of the proceeds are spent on payroll costs. 

Who is eligible for a First Draw PPP loan?

Eligible small entities, that together with their affiliates (if applicable), have 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors—can apply. Entities with more than 500 employees in certain industries that meet SBA’s alternative size standard or SBA’s size standards for those particular industries can also apply. 

Also eligible to apply for First Draw PPP Loans are businesses with a NAICS Code that begins with 72 (Accommodation and Food Services sector) or eligible news organizations with no more than 500 employees per physical location, as well as housing cooperatives, 501(c)(6) organizations, or destination marketing organizations with no more than 300 employees. 

How and when can I apply for a First Draw PPP loan?

Borrowers can apply for a First Draw PPP Loan until March 31, 2021, through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, eligible non-bank lender, or Farm Credit System institution that is participating in PPP. 

What are PPP maximum loan amounts?

In general, first- and second-time PPP borrowers may receive a loan amount of up to 2.5 times their average monthly payroll costs (with a cap per employee of $100,000 annualized) in 2019, 2020, or the year prior to the loan. PPP borrowers with NAICS codes starting with 72 (such as hotels and restaurants) can receive up to 3.5 times their average monthly payroll costs on Second Draw loans.The maximum for a First Draw PPP loan is $10 million, the same as in the original PPP. Applicants must provide a Form 941, Employer’s Quarterly Federal Tax Return, (or other forms with similar information) and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever is used to calculate the loan amount), or equivalent payroll processor records, along with evidence of any retirement and health insurance contributions.

Second Draw PPP Loan FAQs

What is a Second Draw PPP loan? 

Second Draw PPP loans are available for qualified businesses that have already received PPP funds. Second Draw PPP loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement: 

• Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan; 

• The loan proceeds are spent on payroll costs and other eligible expenses; and 

• At least 60 percent of the proceeds are spent on payroll costs. 

What are the eligibility guidelines for a Second Draw PPP loan?

A borrower is generally eligible for a Second Draw PPP Loan if the borrower: 

• Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses; 

• Has no more than 300 employees; and 

• Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. 

How much can you receive for a Second Draw PPP loan?

The formula for Second Draw PPP loans is similar to that of initial loans: 

Non-seasonal businesses existing in 2019 can receive up to 2.5 times their average monthly payroll costs. Average monthly payroll costs can be calculated using one of the following:

• The 12 months prior to the loan or;
• Calendar year 2019 or;
• Calendar year 2020

Seasonal businesses (typically operating for less than seven months in a calendar year) and new businesses in operation on Feb. 15, 2020, but not open for a full 12 months, will use a separate formula to calculate average monthly payroll:

• Average total monthly payroll for any 12-week period between Feb. 15, 2019, and Feb. 15, 2020.

New businesses would calculate: total payroll costs divided by the number of months those costs were paid out.

Hotels, restaurants and other accommodation and food service businesses (Starting with NAICS code 72) can borrow up to 3.5 times their average monthly payroll costs.

What is the maximum loan amount for a Second Draw PPP loan?

For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. 

Will I be able to use my original PPP loan application to support my Second Draw PPP loan request?

In some cases, yes, your supporting documentation will carry over from your first loan application. However, you will be required to complete new SBA forms and sign new certifications. You are encouraged to gather documentation as if you were applying for the first time, as some documentation requirements are different.

PPP Extension FAQs

What are PPP maximum loan amounts?

In general, first- and second-time PPP borrowers may receive a loan amount of up to 2.5 times their average monthly payroll costs (with a cap per employee of $100,000 annualized) in 2019, 2020, or the year prior to the loan. PPP borrowers with NAICS codes starting with 72 (such as hotels and restaurants) can receive up to 3.5 times their average monthly payroll costs on second-draw loans.

The maximum for a first-draw, or for a new PPP loan borrower is $10 million, the same as in the original PPP. 
Applicants must provide a Form 941, Employer’s Quarterly Federal Tax Return, (or other forms with similar information) and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever is used to calculate the loan amount), or equivalent payroll processor records, along with evidence of any retirement and health insurance contributions.

What would the repayment terms be on a PPP loan that is not forgiven?

The unforgiven balance of a PPP loan under this round of PPP loans is a 5-year term loan at a 1% interest rate. 

What are eligible expenses?

PPP borrowers can have their first- and second-draw loans forgiven if the funds are used on eligible costs. As with the first round of the PPP, the costs eligible for loan forgiveness in the revised PPP include payroll, rent, covered mortgage interest, and utilities. In addition, the following costs are now eligible:

• Covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines.

• Covered property damage costs related to property damage and vandalism or looting due to public disturbances in 2020 that were not covered by insurance or other compensation.

• Expenditures to suppliers that are essential at the time of purchase to the recipient’s current operations.

• Covered operating expenditures, which refer to payments for any business software or cloud computing service that facilitates business operations; product or service delivery; the processing, payment, or tracking of payroll expenses; human resources; sales and billing functions; or accounting or tracking of supplies, inventory, records, and expenses.

To be eligible for full loan forgiveness, PPP borrowers will have to spend no less than 60% of the funds on payroll over a covered period between eight or 24 weeks.

I have an existing PPP loan, can I request an increase?

Existing PPP borrowers that did not receive loan forgiveness by December 27, 2020 may: 

(1) reapply for a First Draw PPP Loan if they previously returned some or all of their First Draw PPP Loan funds, or 

(2) under certain circumstances, request to modify their First Draw PPP Loan amount if they previously did not accept the full amount for which they are eligible. 

I just opened up my business in December, 2019. I did receive a PPP loan in the first round, but I don’t have full Q4 quarter-to-quarter comparisons. Am I still eligible for a PPP Second Draw?

The SBA had modifications for new businesses, and the Interim Final Rule says: 

If the applicant was not in business during 2019, but was in operation on February 15, 2020, the applicant had gross receipts during the second, third, or fourth quarter of 2020 that demonstrate at least a 25 % reduction from the gross receipts of the entity during the first quarter of 2020 (for example, an applicant that had gross receipts of $50,000 in the first quarter of 2020 and had gross receipts of $30,000 in the fourth quarter of 2020 – demonstrating a reduction of 40 percent from the applicant’s gross receipts during the first quarter in 2020).

Which PPP borrowers can reapply or request an increase in their PPP loan amount?

The following borrowers can reapply or request an increase in their PPP loan amount: 

• If a borrower returned all of a PPP loan, the borrower may reapply for a PPP loan in an amount the borrower is eligible for under current PPP rules. 

• If a borrower returned part of a PPP loan, the borrower may reapply for an amount equal to the difference between the amount retained and the amount previously approved. o If a borrower did not accept the full amount of a PPP loan for which it was approved, the borrower may request an increase in the amount of the PPP loan up to the amount previously approved. 

What does ‘full-time equivalent employees’ mean?

Full-time equivalent employees (FTEs) is a calculation based on the hours worked for both full-time and part-time employees over a workweek. If an employer has a 40-hour workweek, an employee that works 40 hours during that week is 1.0 full-time equivalent employee.

There are 2 methods for calculating an individual who has worked less than full-time:

• An employer can take the number of average hours worked by an employee during the covered period and divide the number of hours by 40. For example, an employee who works 30 hours per week during the covered period would equal .75. An employee who worked 20 hours would be calculated as 0.5, and an employee who works 10 hours would be calculated as 0.25.

• An employer can simply assign each employee who works less than full time as a .5.

What is the reference period?

The reference period refers to the time period used to calculate a borrower’s PPP loan amount. The reference period is a period prior to receipt of the PPP loan used as a baseline in calculating the number of FTE a business may have.

The majority of businesses have 2 options; February 15, 2019 – June 30, 2019 OR January and February 2020. If you have a seasonal business, you get a third option—any consecutive 12-week period from May 1, 2019 – September 15, 2019.

Please note that the SBA and Treasury could change the program guidelines at any time without notice. We will update these FAQs as soon as we learn Interim Final Rules have been changed. These FAQs are being shared to provide guidance. We highly recommend you talk to your accountant or attorney for financial advice. 

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Payroll Protection Program FAQs

What is the Paycheck Protection Program?

The Paycheck Protection Program (PPP) is designed to provide a direct incentive for small businesses to keep their workers on the payroll. It authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis.

PPP loans will be forgiven if all employees are kept on the payroll for eight weeks and the money is used for payroll (75% of loan), rent, mortgage interest, or utilities.

The PPP eliminates many of the requirements of a typical Small Business Administration(SBA) loan and expands the types of businesses that are eligible for relief.The SBA continues to provide guidance regarding this program. Please check back frequently for updates. 

Who can apply?

This program is for any small business with less than 500 employees(including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans’ organizations affected by coronavirus/COVID-19. There are businesses that can apply that do not typically fall within the SBA eligibility guidelines, please determine eligibility here.

  • Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.
  • Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.
  • The SBA has also determined that certain religious organizations are eligible to apply for PPP loans.  This is not yet updated in their “Businesses Not Eligible” Guidelines so if you have any questions, you can reach out to your local SBA District office for more guidance.   
Where can I apply for a PPP loan?

As an SBA Preferred Lender, Firstrust Bank will provide small business loans through the Paycheck Protection Program.This program authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. Due to overwhelming volume, Firstrust will only be accepting applications from existing business customers at this time.  We will be assessing our ability to service non-customers on an ongoing basis. Visit our resource center to stay updated.

Does a business owned by large companies that have enough liquidity to support the business’s ongoing operations qualify for a PPP loan?

In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application.

Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere, borrowers still must certify in good faith that their PPP loan request is necessary.

Specifically,before submitting a PPP application, all borrowers should review carefully the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”

Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.

Lenders may rely on a borrower’s certification regarding the necessity of the loan request.

Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.

How large can my loan be?

Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. That amount is subject to a $10 million cap. Payroll costs will be capped at $100,000 annualized for each employee. If you are a seasonal or new business, you will use different applicable time periods for your calculation. In evaluating a borrower’s eligibility, a lender may consider whether a seasonal borrower was in operation on February 15, 2020, or for an 8-week period between February 15, 2019, and June 30, 2019.

What counts as payroll costs?

Payroll costs include:

  • Salary, wage, commission, or tips (capped at $100,000     annualized for each employee)
  • Payments for vacation, parental, family, medical, or     sick leave
  • Allowance for dismissal or separation (severance costs)
  • Group health care benefits, including insurance     premiums
  • Retirement benefits
  • State or local tax assessed on employee     compensation 
  • For a sole proprietor or independent contractor: wages,     commissions, income, or net earnings from self-employment, capped at     $100,000 annualized for each employee.
Can K-1 income be included as salaries and wages in payroll calculations?

The PPP is designed to help businesses float payroll to keep people employed. As such, if K-1 income is a distribution from profits/losses, it is not to be included. However, if a K-1 distribution is used for the purpose of providing a salary (i.e. regular weekly or monthly payments) and payroll or self-employment taxes are paid on those funds, then it may be considered.

I have stopped paying employees, but would like to restart their payroll, do I qualify for the PPP?

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. As long as you start payroll and maintain 2019 average monthly salary expenses and employee count as of 2/15/2020, the Small Business Administration will consider your application. You will be required to provide proof of operation and payroll expenses as of February 15, 2020. Once approved, any loan proceeds used within 8 weeks may be eligible for forgiveness. We will provide more guidance on applying for forgiveness soon.

Are 1099’s considered payroll?

1099’s are not considered payroll for companies that issue the 1099. The actual subcontractor should file their own PPP request with their income as the loan amount.

How do I ensure my loan is forgiven?

Loans will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (per the SBA’s website, at least 75% of the forgiven amount must have been used for payroll).

  • Funds used within an 8 week period may be eligible for forgiveness.
  • Forgiveness is based on the employer maintaining or quickly rehiring employees and keeping salary and headcount levels.  
  • Borrowers will owe money when the loan is due if full-time headcount declines, or if salaries and wages decrease by more than 25% for any employee that made less than $100,000 annualized in 2019.
What if repayment is required?

If repayment is required, loan payments will be deferred for six months. Below are the terms of the SBA’s Paycheck Protection Program repayment.

  • No collateral or personal guarantees are required.
  • Neither the government nor lender will charge small businesses any fees.
  • This loan has a maturity of 2 years and an interest rate of 1%.
Does my business qualify for the Paycheck Protection Program?

This program is for any small business with less than 500 employees (including sole proprietorship's, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19. There are businesses that can apply that do not typically fall within the SBA eligibility guidelines, please determine eligibility here.

  • Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.
  • Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.
  • The SBA has also determined that certain religious organizations are eligible to apply for PPP loans.  This is not yet updated in their “Businesses Not Eligible” Guidelines so if you have any questions, you can reach out to your local SBA District office for more guidance.

What if I do not qualify for the Payroll Protection Program?

There are currently many federal and state programs available to help business owners navigate these difficult times. The SBA also offers:

  • Small Business Debt Relief Program will forgive the first 6 months of payments for new and existing 7(a), 504, and microloan borrowers meeting the requirements. Firstrust can assist borrowers with new microloans.
  • Another option is an Economic Injury Disaster Loan (EIDL) to assist borrowers with Debts, Accounts Payable, and some payroll related expenses. This loan may provide up to $10,000 of economic relief to businesses that are currently experiencing difficulties.To learn more or to apply click here.
  • The SBA has also determined, but has not updated this is their “Businesses Not Eligible” Guidelines, that certain religious organizations are eligible for to apply for PPP loans. If you have any questions, you can reach out to your local SBA District office for more guidance.
Can I pay my loan earlier than 2 years?

Yes. There are no prepayment penalties or fees.

Do I need to personally guarantee this loan?

No. There is no personal guarantee requirement.

However, if the proceeds are used for fraudulent purposes, the U.S. government will pursue criminal charges against you.

Do I need to first look for other funds before applying to this program?

No. The SBA is waiving the usual SBA requirement that you try to obtain some or all of the loan funds from other sources (i.e., we are waiving the Credit Elsewhere requirement).

What if the allocated funds run out prior to my application/funding?

There may be more applicants and requests for loans than available funds from the SBA. If that occurs, not every qualified applicant will receive loan proceeds under the Paycheck Protection Program.

If I already have a loan with Firstrust, can I use these funds to pay that loan?

Yes, customers can use the Paycheck Protection Program loan proceeds to pay interest on Firstrust Bank loans. However, any amount applied to non-mortgage debt or principal payments will not qualify for loan forgiveness.

Can I apply for more than one PPP loan?

No. The Government limits each eligible borrower to only one PPP loan. This means that if you apply for a PPP loan you should consider applying for the maximum amount that you are eligible to receive.

Can I apply for both an Economic Injury Disaster Loan (EIDL) and a loan through the Paycheck Protection Program?

No. The Government limits each eligible borrower to only one PPP loan. This means that if you apply for a PPP loan you should consider applying for the maximum amount that you are eligible to receive. For more information regarding the Economic Injury Disaster Loan (EIDL) program, refer to our EIDL Guide.

What is the Paycheck Protection Program (PPP) Forgiveness and how do I qualify?

PPP loan borrowers can have their loans forgiven if they use the money for designated expenses, including payroll costs, and interest on mortgage, rent, and utility payments.

How much of the PPP loan can be forgiven?
  • The amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest, so long as the applicant keeps salary and employee counts the same.
  • The amount forgiven will be reduced proportionally by any reduction in the number of employees retained during the 8 or 24 weeks before June 5th; and 24 weeks after June 5th, period after receipt of the loan compared to one of two prior pay period time periods determined by the borrower and reduced by the reduction in pay of any employee beyond 40% of their prior year compensation.
What part of the PPP is eligible for forgiveness?

Costs eligible for forgiveness include payroll costs, payments of interest on mortgage obligations incurred before February 15,2020, rent payments on leases dated before February 15, 2020, and utility payments under service agreements dated before February 15, 2020, over the 8-week period following the date of the loan. The Treasury clarified in its Interim Final Rule that at least 60% of the loan amount must be used for payroll costs, and that no more than 40% of the loan proceeds can be forgiven for non-payroll costs.

Where do I apply for PPP forgiveness?

If Firstrust is servicing your PPP loan, you can submit a request to us for part or all of the loan to be forgiven. Firstrust will need to collect paperwork in connection with the forgiveness and essentially make an application to the SBA for that forgiveness. We will make a determination on your loan forgiveness request within 60 days of receiving your request.

What do I need to provide the lender to get the PPP forgiveness?

Borrowers need to maintain documentation of the use of their PPP funds. The CARES Act expressly requires that the borrower be able to adequately document the use ofthe funds in order to obtain forgiveness. A forgiveness analysis of your PPP loan based on the following metrics: reduction in headcount, reduction in wages, and rehires.

What are the loan terms if my PPP loan (or a portion of the loan) is not forgiven?

The loan has a maturity of two years and an interest rate of 1.00%. There will be no prepayment penalty, meaning you will be able to repay the loan at any time before the maturity date. There is no collateral or personal guarantee required. All loans will be processed by third-party lenders under delegated authority of the SBA, and the lenders are permitted to rely on the certifications of the borrowers in order to determine eligibility of the borrower and the use of loan proceeds.

Payroll Protection Program FAQs

What is the Paycheck Protection Program?

The Paycheck Protection Program (PPP) is designed to provide a direct incentive for small businesses to keep their workers on the payroll. It authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis.

PPP loans will be forgiven if all employees are kept on the payroll for eight weeks and the money is used for payroll (75% of loan), rent, mortgage interest, or utilities.

The PPP eliminates many of the requirements of a typical Small Business Administration(SBA) loan and expands the types of businesses that are eligible for relief.The SBA continues to provide guidance regarding this program. Please check back frequently for updates. 

Who can apply?

This program is for any small business with less than 500 employees(including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans’ organizations affected by coronavirus/COVID-19. There are businesses that can apply that do not typically fall within the SBA eligibility guidelines, please determine eligibility here.

  • Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.
  • Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.
  • The SBA has also determined that certain religious organizations are eligible to apply for PPP loans.  This is not yet updated in their “Businesses Not Eligible” Guidelines so if you have any questions, you can reach out to your local SBA District office for more guidance.   
Where can I apply for a PPP loan?

As an SBA Preferred Lender, Firstrust Bank will provide small business loans through the Paycheck Protection Program.This program authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. Due to overwhelming volume, Firstrust will only be accepting applications from existing business customers at this time.  We will be assessing our ability to service non-customers on an ongoing basis. Visit our resource center to stay updated.

Does a business owned by large companies that have enough liquidity to support the business’s ongoing operations qualify for a PPP loan?

In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application.

Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere, borrowers still must certify in good faith that their PPP loan request is necessary.

Specifically,before submitting a PPP application, all borrowers should review carefully the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”

Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.

Lenders may rely on a borrower’s certification regarding the necessity of the loan request.

Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.

How large can my loan be?

Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. That amount is subject to a $10 million cap. Payroll costs will be capped at $100,000 annualized for each employee. If you are a seasonal or new business, you will use different applicable time periods for your calculation. In evaluating a borrower’s eligibility, a lender may consider whether a seasonal borrower was in operation on February 15, 2020, or for an 8-week period between February 15, 2019, and June 30, 2019.

What counts as payroll costs?

Payroll costs include:

  • Salary, wage, commission, or tips (capped at $100,000     annualized for each employee)
  • Payments for vacation, parental, family, medical, or     sick leave
  • Allowance for dismissal or separation (severance costs)
  • Group health care benefits, including insurance     premiums
  • Retirement benefits
  • State or local tax assessed on employee     compensation 
  • For a sole proprietor or independent contractor: wages,     commissions, income, or net earnings from self-employment, capped at     $100,000 annualized for each employee.
Can K-1 income be included as salaries and wages in payroll calculations?

The PPP is designed to help businesses float payroll to keep people employed. As such, if K-1 income is a distribution from profits/losses, it is not to be included. However, if a K-1 distribution is used for the purpose of providing a salary (i.e. regular weekly or monthly payments) and payroll or self-employment taxes are paid on those funds, then it may be considered.

I have stopped paying employees, but would like to restart their payroll, do I qualify for the PPP?

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. As long as you start payroll and maintain 2019 average monthly salary expenses and employee count as of 2/15/2020, the Small Business Administration will consider your application. You will be required to provide proof of operation and payroll expenses as of February 15, 2020. Once approved, any loan proceeds used within 8 weeks may be eligible for forgiveness. We will provide more guidance on applying for forgiveness soon.

Are 1099’s considered payroll?

1099’s are not considered payroll for companies that issue the 1099. The actual subcontractor should file their own PPP request with their income as the loan amount.

How do I ensure my loan is forgiven?

Loans will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (per the SBA’s website, at least 75% of the forgiven amount must have been used for payroll).

  • Funds used within an 8 week period may be eligible for forgiveness.
  • Forgiveness is based on the employer maintaining or quickly rehiring employees and keeping salary and headcount levels.  
  • Borrowers will owe money when the loan is due if full-time headcount declines, or if salaries and wages decrease by more than 25% for any employee that made less than $100,000 annualized in 2019.
What if repayment is required?

If repayment is required, loan payments will be deferred for six months. Below are the terms of the SBA’s Paycheck Protection Program repayment.

  • No collateral or personal guarantees are required.
  • Neither the government nor lender will charge small businesses any fees.
  • This loan has a maturity of 2 years and an interest rate of 1%.
Does my business qualify for the Paycheck Protection Program?

This program is for any small business with less than 500 employees (including sole proprietorship's, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19. There are businesses that can apply that do not typically fall within the SBA eligibility guidelines, please determine eligibility here.

  • Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.
  • Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.
  • The SBA has also determined that certain religious organizations are eligible to apply for PPP loans.  This is not yet updated in their “Businesses Not Eligible” Guidelines so if you have any questions, you can reach out to your local SBA District office for more guidance.

What if I do not qualify for the Payroll Protection Program?

There are currently many federal and state programs available to help business owners navigate these difficult times. The SBA also offers:

  • Small Business Debt Relief Program will forgive the first 6 months of payments for new and existing 7(a), 504, and microloan borrowers meeting the requirements. Firstrust can assist borrowers with new microloans.
  • Another option is an Economic Injury Disaster Loan (EIDL) to assist borrowers with Debts, Accounts Payable, and some payroll related expenses. This loan may provide up to $10,000 of economic relief to businesses that are currently experiencing difficulties.To learn more or to apply click here.
  • The SBA has also determined, but has not updated this is their “Businesses Not Eligible” Guidelines, that certain religious organizations are eligible for to apply for PPP loans. If you have any questions, you can reach out to your local SBA District office for more guidance.
Can I pay my loan earlier than 2 years?

Yes. There are no prepayment penalties or fees.

Do I need to personally guarantee this loan?

No. There is no personal guarantee requirement.

However, if the proceeds are used for fraudulent purposes, the U.S. government will pursue criminal charges against you.

Do I need to first look for other funds before applying to this program?

No. The SBA is waiving the usual SBA requirement that you try to obtain some or all of the loan funds from other sources (i.e., we are waiving the Credit Elsewhere requirement).

What if the allocated funds run out prior to my application/funding?

There may be more applicants and requests for loans than available funds from the SBA. If that occurs, not every qualified applicant will receive loan proceeds under the Paycheck Protection Program.

If I already have a loan with Firstrust, can I use these funds to pay that loan?

Yes, customers can use the Paycheck Protection Program loan proceeds to pay interest on Firstrust Bank loans. However, any amount applied to non-mortgage debt or principal payments will not qualify for loan forgiveness.

Can I apply for more than one PPP loan?

No. The Government limits each eligible borrower to only one PPP loan. This means that if you apply for a PPP loan you should consider applying for the maximum amount that you are eligible to receive.

Can I apply for both an Economic Injury Disaster Loan (EIDL) and a loan through the Paycheck Protection Program?

No. The Government limits each eligible borrower to only one PPP loan. This means that if you apply for a PPP loan you should consider applying for the maximum amount that you are eligible to receive. For more information regarding the Economic Injury Disaster Loan (EIDL) program, refer to our EIDL Guide.

What is the Paycheck Protection Program (PPP) Forgiveness and how do I qualify?

PPP loan borrowers can have their loans forgiven if they use the money for designated expenses, including payroll costs, and interest on mortgage, rent, and utility payments.

How much of the PPP loan can be forgiven?
  • The amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest, so long as the applicant keeps salary and employee counts the same.
  • The amount forgiven will be reduced proportionally by any reduction in the number of employees retained during the 8 or 24 weeks before June 5th; and 24 weeks after June 5th, period after receipt of the loan compared to one of two prior pay period time periods determined by the borrower and reduced by the reduction in pay of any employee beyond 40% of their prior year compensation.
What part of the PPP is eligible for forgiveness?

Costs eligible for forgiveness include payroll costs, payments of interest on mortgage obligations incurred before February 15,2020, rent payments on leases dated before February 15, 2020, and utility payments under service agreements dated before February 15, 2020, over the 8-week period following the date of the loan. The Treasury clarified in its Interim Final Rule that at least 60% of the loan amount must be used for payroll costs, and that no more than 40% of the loan proceeds can be forgiven for non-payroll costs.

Where do I apply for PPP forgiveness?

If Firstrust is servicing your PPP loan, you can submit a request to us for part or all of the loan to be forgiven. Firstrust will need to collect paperwork in connection with the forgiveness and essentially make an application to the SBA for that forgiveness. We will make a determination on your loan forgiveness request within 60 days of receiving your request.

What do I need to provide the lender to get the PPP forgiveness?

Borrowers need to maintain documentation of the use of their PPP funds. The CARES Act expressly requires that the borrower be able to adequately document the use ofthe funds in order to obtain forgiveness. A forgiveness analysis of your PPP loan based on the following metrics: reduction in headcount, reduction in wages, and rehires.

What are the loan terms if my PPP loan (or a portion of the loan) is not forgiven?

The loan has a maturity of two years and an interest rate of 1.00%. There will be no prepayment penalty, meaning you will be able to repay the loan at any time before the maturity date. There is no collateral or personal guarantee required. All loans will be processed by third-party lenders under delegated authority of the SBA, and the lenders are permitted to rely on the certifications of the borrowers in order to determine eligibility of the borrower and the use of loan proceeds.

Personal Mortgage FAQs

What is Firstrust doing for borrowers who are out of work and cannot make their payments?

During these exceptionally challenging times, we are here to help you navigate the various mortgage assistance programs that may be available to help you. Click here for information about specific assistance options or to request payment assistance.

Please know that we are aware of the new Corona virus Stimulus Bill (CARES Act) the President signed into law on Friday, March 27, 2020. We are reviewing the requirements under the law and will begin offering any additional assistance programs as soon as possible. As different support options become available, we will post new information online at Firstrust.loanadministration.com.

I have tried to call the mortgage customer service number and can’t get through.

During this time of uncertainty and need, we have been experiencing significantly higher than normal call volumes and wait times. We are diligently working to assist those who have been directly impacted.

If you are contacting us for a reason other than payment assistance options related to the Corona virus, we would ask that you self-serve by using our website and automated phone system which are both available 24/7. We are waiving any applicable fees to make a payment through our automated pay-by-phone system at 800-229-0272.

If you need additional assistance, we are here to help! You can contact us online, speak to your Banker directly, email firstsite@firstrust.com,or call 800-220-BANK.

I am unable to make my mortgage payment

If you’ve been impacted financially by the Corona virus, whether due to illness or loss of employment, you can find information about our mortgage assistance options here.

As different support options become available, we will share new information on Firstrust.loanadministration.com. If you need additional assistance, we are here to help! You can contact us online,speak to your Banker directly, email firstsite@firstrust.com, or call 800-229-0272.

If I am approved for a forbearance, what about credit reporting and late fees?

If forbearance eligibility requirements are met, negative credit reporting and late charges will not occur during the duration of the forbearance period.  

A forbearance is a temporary suspension of your monthly mortgage payment. During the forbearance period, your payments are suspended for a set period of time. However, if you are able to make partial payments, it will reduce the amount due at the end of the forbearance period. Click here to learn more about payment assistance options.

Additional FAQs

Frequenty Asked Questions

What is Firstrust Bank doing to prevent the spread of COVID-19?

For over 85 years Firstrust Bank has been committed to providing safe and secure financial services to our customers and communities. While our nation is currently experiencing unprecedented times, Firstrust Bank, a third generation family owned business founded at the height of the Great Depression, has experience navigating challenging economic conditions. We understand everyone is impacted differently and are committed to helping our customers, employees, and communities weather this global crisis. At the guidance of the Center for Disease Control, Firstrust Bank is following these best practices to help stop the spread of coronavirus. Learn more

To limit in person contact, our branch offices will provide drive-thru services. Our lobby will be available by appointment only. To access your safe deposit box or make an appointment with a banker, please contact your local branch office directly to schedule an in-person meeting. Click here for hours and contact information.

As always, our bankers and online banking platforms are ready to help you get through this crisis. Please call 800-220-BANK, email us at firstsite@firstrust.com or call your banker to receive the personal service you expect from Firstrust.

How can I protect myself or my business?

• While much of the world is working through disrupted routines over the last several weeks, with escalating uncertainty and new anxiety-provoking news each day, cyber criminals are using Covid-19 as an opportunity to exploit individuals by conducting phishing attacks and disinformation campaigns.

• We want you to be vigilant and watch out for scams. Exercise caution in handling any email with a COVID-19-related subject line, attachment, or hyperlink, and be wary of social media pleas, texts, or calls related to COVID-19.

For details on how to protect yourself or your business, see more at our blog article

For more information on charity scams, see the Federal Trade Commission’s page

• We are here to help wherever, whenever! Our Customer Care team is ready to assist you by phone, email, or online. Send us a secure message within online banking to protect sensitive information, call us at 800-220-BANK, or email firstsite@firstrust.com.

My branch is currently closed, how can I manage my finances?

Providing you with safe and convenient access to your money is important to us! Click here for branch drive thru hours and locations. Serving our customers wherever they are, whenever they want, with whatever they need is our priority.

Our bankers and online banking platforms are ready to help you get through this crisis. Please call 800-220-BANK, email firstsite@firstrust.com, or call your banker to receive the personal service you expect from Firstrust. This is also a great time take advantage of our investment in technology that makes it easier and safer than ever to manage your finances online or from your mobile device. For your protection, we encourage customers to consider the following cashless alternatives:

Mobile Wallet - Need to pay for groceries, lunch or get gas? When you add your Firstrust Bank debit or credit card to your mobile wallet on your phone, you can safely and securely pay for everyday purchases without taking your card out of your wallet anywhere Apple Pay®, Samsung Pay®, and Google Pay® are accepted.

Mobile Banking App - In addition to checking balances, transferring money, and viewing statements online, consider using your debit card to send money to friends or family from the Firstrust Mobile App. That’s right, Select Move Money, and then “Pay Other People” from the left navigation menu to register your debit card. Add contacts using friend’s telephone or email to send cash instant! The person you are sending money to will receive an email or text alert to accept your transfer.

ATM Debit Card - Firstrust Bank does not charge customers any fees to access their cash. While we cannot control what others charge for use of their machines, know that Firstrust customers can access their cash for free at any Firstrust ATM Machine. Where possible, it is encouraged to limit the use of cash. Using your Firstrust Debit card online or in person is a great way to limit the exchange of cash amid growing health concerns. If you do not have a Visa Debit Card, please call 800-220-BANK to order your card today!

Telephone Banking - FirstCall telephone banking is available 24/7 to check balances, hear to recent transactions, and transfer money. Call 800-220-BANK, option 1

What if I need to open a new account or apply for a loan?

Rest assured, Firstrust Bank is committed to being with you every step of the way. We have strong business continuity plans, so while many of our employees are working from remote locations, we have—and will continue to have—the infrastructure required to meet your evolving needs wherever you are, whenever you need us, with whatever it is we can do to help! For your convenience, you can apply for new accounts online or over the phone with the help of a banker today.

• Consumer deposit and loan accounts can be opened online at Personal Banking Product Center

• Apply for a Small Business Line of Credit at Firstline

• Business and Commercial customers should contact your personal banker or call 800-220-BANK for concierge banking support.

How can I access my safe deposit box?

We are here to deliver the same great service you’ve come to expect, despite the unprecedented circumstances before us. Please contact the branch directly to schedule a time to access your safe deposit box while our lobby services are restricted to appointment only as we work to limit the number of people inside our offices at the same time. Click here for office hours, locations, and direct branch contact information. Should you have additional questions, please call 800-220-BANK or email us at firstsite@firstrust.com.

I am out of work. What if I cannot afford my expenses or to repay financial obligations?

Your safety and well-being is our number one priority. Our Founder, Samuel A. Green, made the commitment to help our valued customers and communities survive and thrive when Firstrust Bank was started in the depths of the Great Depression of 1934. Our core beliefs and values of service, determination and resilience remain as true today as they were then, especially in times like these.

We recognize your personal and business operations may be disrupted by the mandated closures, restrictions or other government actions designed to stop the further spread of the coronavirus – we are here to consult, advise and support you. Should you encounter a hardship as a result of the coronavirus, please reach out to your personal banker or call 800-220-BANK to discuss your personal situation. With so much uncertainty around you, we will strive to be a pillar of safety and strength.

My business was forced to close and I am worried I will not be able to make my payments.

As a privately-owned and family managed bank, currently in its 3rd generation, born-and-bred in Philadelphia, we remain focused on what is best for our customers, employees and the communities we serve over the long term. One of the strengths of our organization is the many, multi-layered relationships we have with our customers which allow us to provide creative solutions to help your business survive during times of great uncertainty. We recognize your personal and business operations may be disrupted by the mandated closures, restrictions or other government actions designed to stop the further spread of the coronavirus – we are here to consult, advise and support you.

With so much uncertainty around you, we will strive to be a pillar of safety and strength. Should you encounter a hardship as a result of the coronavirus, please reach out to your personal banker, relationship manager, or customer care specialist at 800-220-BANK to discuss your personal situation as we navigate these unchartered waters together.

Additional FAQs

Frequenty Asked Questions

What is Firstrust Bank doing to prevent the spread of COVID-19?

For over 85 years Firstrust Bank has been committed to providing safe and secure financial services to our customers and communities. While our nation is currently experiencing unprecedented times, Firstrust Bank, a third generation family owned business founded at the height of the Great Depression, has experience navigating challenging economic conditions. We understand everyone is impacted differently and are committed to helping our customers, employees, and communities weather this global crisis. At the guidance of the Center for Disease Control, Firstrust Bank is following these best practices to help stop the spread of coronavirus. Learn more

To limit in person contact, our branch offices will provide drive-thru services. Our lobby will be available by appointment only. To access your safe deposit box or make an appointment with a banker, please contact your local branch office directly to schedule an in-person meeting. Click here for hours and contact information.

As always, our bankers and online banking platforms are ready to help you get through this crisis. Please call 800-220-BANK, email us at firstsite@firstrust.com or call your banker to receive the personal service you expect from Firstrust.

How can I protect myself or my business?

• While much of the world is working through disrupted routines over the last several weeks, with escalating uncertainty and new anxiety-provoking news each day, cyber criminals are using Covid-19 as an opportunity to exploit individuals by conducting phishing attacks and disinformation campaigns.

• We want you to be vigilant and watch out for scams. Exercise caution in handling any email with a COVID-19-related subject line, attachment, or hyperlink, and be wary of social media pleas, texts, or calls related to COVID-19.

For details on how to protect yourself or your business, see more at our blog article

For more information on charity scams, see the Federal Trade Commission’s page

• We are here to help wherever, whenever! Our Customer Care team is ready to assist you by phone, email, or online. Send us a secure message within online banking to protect sensitive information, call us at 800-220-BANK, or email firstsite@firstrust.com.

My branch is currently closed, how can I manage my finances?

Providing you with safe and convenient access to your money is important to us! Click here for branch drive thru hours and locations. Serving our customers wherever they are, whenever they want, with whatever they need is our priority.

Our bankers and online banking platforms are ready to help you get through this crisis. Please call 800-220-BANK, email firstsite@firstrust.com, or call your banker to receive the personal service you expect from Firstrust. This is also a great time take advantage of our investment in technology that makes it easier and safer than ever to manage your finances online or from your mobile device. For your protection, we encourage customers to consider the following cashless alternatives:

Mobile Wallet - Need to pay for groceries, lunch or get gas? When you add your Firstrust Bank debit or credit card to your mobile wallet on your phone, you can safely and securely pay for everyday purchases without taking your card out of your wallet anywhere Apple Pay®, Samsung Pay®, and Google Pay® are accepted.

Mobile Banking App - In addition to checking balances, transferring money, and viewing statements online, consider using your debit card to send money to friends or family from the Firstrust Mobile App. That’s right, Select Move Money, and then “Pay Other People” from the left navigation menu to register your debit card. Add contacts using friend’s telephone or email to send cash instant! The person you are sending money to will receive an email or text alert to accept your transfer.

ATM Debit Card - Firstrust Bank does not charge customers any fees to access their cash. While we cannot control what others charge for use of their machines, know that Firstrust customers can access their cash for free at any Firstrust ATM Machine. Where possible, it is encouraged to limit the use of cash. Using your Firstrust Debit card online or in person is a great way to limit the exchange of cash amid growing health concerns. If you do not have a Visa Debit Card, please call 800-220-BANK to order your card today!

Telephone Banking - FirstCall telephone banking is available 24/7 to check balances, hear to recent transactions, and transfer money. Call 800-220-BANK, option 1

What if I need to open a new account or apply for a loan?

Rest assured, Firstrust Bank is committed to being with you every step of the way. We have strong business continuity plans, so while many of our employees are working from remote locations, we have—and will continue to have—the infrastructure required to meet your evolving needs wherever you are, whenever you need us, with whatever it is we can do to help! For your convenience, you can apply for new accounts online or over the phone with the help of a banker today.

• Consumer deposit and loan accounts can be opened online at Personal Banking Product Center

• Apply for a Small Business Line of Credit at Firstline

• Business and Commercial customers should contact your personal banker or call 800-220-BANK for concierge banking support.

How can I access my safe deposit box?

We are here to deliver the same great service you’ve come to expect, despite the unprecedented circumstances before us. Please contact the branch directly to schedule a time to access your safe deposit box while our lobby services are restricted to appointment only as we work to limit the number of people inside our offices at the same time. Click here for office hours, locations, and direct branch contact information. Should you have additional questions, please call 800-220-BANK or email us at firstsite@firstrust.com.

I am out of work. What if I cannot afford my expenses or to repay financial obligations?

Your safety and well-being is our number one priority. Our Founder, Samuel A. Green, made the commitment to help our valued customers and communities survive and thrive when Firstrust Bank was started in the depths of the Great Depression of 1934. Our core beliefs and values of service, determination and resilience remain as true today as they were then, especially in times like these.

We recognize your personal and business operations may be disrupted by the mandated closures, restrictions or other government actions designed to stop the further spread of the coronavirus – we are here to consult, advise and support you. Should you encounter a hardship as a result of the coronavirus, please reach out to your personal banker or call 800-220-BANK to discuss your personal situation. With so much uncertainty around you, we will strive to be a pillar of safety and strength.

My business was forced to close and I am worried I will not be able to make my payments.

As a privately-owned and family managed bank, currently in its 3rd generation, born-and-bred in Philadelphia, we remain focused on what is best for our customers, employees and the communities we serve over the long term. One of the strengths of our organization is the many, multi-layered relationships we have with our customers which allow us to provide creative solutions to help your business survive during times of great uncertainty. We recognize your personal and business operations may be disrupted by the mandated closures, restrictions or other government actions designed to stop the further spread of the coronavirus – we are here to consult, advise and support you.

With so much uncertainty around you, we will strive to be a pillar of safety and strength. Should you encounter a hardship as a result of the coronavirus, please reach out to your personal banker, relationship manager, or customer care specialist at 800-220-BANK to discuss your personal situation as we navigate these unchartered waters together.

Need Help?

If you are a customer who is experiencing a hardship related to family sickness or workplace closures due to COVID-19, contact your Relationship Manager, Branch Manager or Customer Care Center 800-220-BANK, and we will work with you.