UPDATED ON 1/20/21.
What is a Paycheck Protection Program (PPP) Loan?
PPP loans provide funds to small businesses to keep their workers on the payroll. These loans are forgiven if all employees are kept on the payroll for eight weeks and the money is used directly for payroll, rent, mortgage interest, or utilities (at least 75% of the loan must be used for payroll for the loan to be forgiven).
You can find more information about the PPP on the Small Business Administration’s (SBA) website.
Note that NWCU is currently only accepting applications from existing NWCU PPP borrowers and/or existing NWCU business members. We are processing both first-draw and second-draw loans.
How to Calculate PPP Loan Amounts
You can find information here:
- How to Calculate First-Draw PPP Loan Amounts
- Second-Draw PPP Loans: How to Calculate Revenue Reduction and Maximum Loan Amounts (including what documentation to provide)
Who is Eligible for a PPP Loan?
Note: these requirements have changed with the newest round of funding, so please read carefully.
Businesses or entities (listed below) that have been in operation since February 15, 2020 are eligible for a PPP loan.
Requirements for all loans:
- Borrowers are still required to spend at least 60% of funds on payroll-related expenses.
- Non-payroll expenses have been expanded to include personal protective equipment, supplier costs, operations expenditures, and others.
- Borrowers will have a choice of an 8-week or a 24-week covered period.
First-draw requirements (only):
- Must have been in operation since February 15, 2020.
Second-draw requirements (only):
- Business must show at least a 25% reduction in gross receipts in the first, second, or third quarter of 2020 compared to the same quarter in 2019 for second-draw loans only.
- Second-draw PPP borrowers will generally be eligible to borrow an amount to 2.5 times their average monthly payroll costs. . Businesses with NAICS codes beginning with "72" will be able to borrow up to 3.5 times their average monthly payroll costs. NAICIS class "72" typically includes food service and accommodations industries.
Note that NWCU will only be accepting applications from existing NWCU PPP borrowers and/or existing NWCU business members.
How Do I Apply for a PPP Loan?
NWCU is currently only accepting 2021 applications from existing NWCU PPP borrowers and/or existing NWCU business members.
To apply for a PPP loan from Northwest Community Credit Union, you'll need to gather some financial informations and documents. You'll apply electronically.
An application will only be processed if complete. A completed application includes all of the following:
- A completed SBA application (electronic)
- Payroll information, including
- Quarterly Tax Form 941 for all four quarters of 2020 or Annual Form 944 for 2020
- Or 2019 and/or 2020 Complete 1040 tax returns, if filed
- Borrower will need to report any salaries greater than $100,000 in 2019 or any independent contract payments during the year.
- Organization documents
- Articles of Incorporation and Bylaws (Corporations)
- Articles of Organization and Operating Agreement (LLCs)
- Partnership Agreement (Partnerships)
Once you have submitted a completed application, we'll follow up with you if you've been approved.
What can I use the PPP Loan For?
- Payroll costs:
- Salary, wages, commissions, tips, or equivalent.
- Employee Benefits, including paid time off, allowance for dismissal, associated costs for group health care benefits, including insurance premiums.
- Retirement benefits.
- State and local taxes assessed by employee compensation.
- Interest payments on mortgage obligations (this does NOT include prepayment of or payment of principal on mortgage obligations).
- Rent, including rent under lease agreements – must have been in force before February 15, 2020.
- Utilities – must have been in force from February 15, 2020.
- Interest on other debt obligations that were incurred before February 15, 2020.
- Worker protection costs related to COVID-19.
- Uninsured property damages caused by looting or vandalism during 2020.
- Certain supplier costs and expenses for operations.
How Do I Ensure the PPP Loan is Forgiven?
You are eligible for loan forgiveness from the Small Business Administration equal to the amount you spent on the following items during the covered period (8 or 24 weeks) beginning on the loan’s date of origination:
- Payroll costs (at least 60% of the loan must be used for payroll costs)
- Interest on your mortgage obligation incurred during the ordinary course of business
- Rent on a leasing agreement
- Utility payments (gas, water, electricity, telephone/internet, transportation)
- Additional wages paid to tipped employees
- Other eligible expenses
Any loan forgiveness will be determined by the SBA’s Program rules. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.