SBA Paycheck Protection Program FAQs


Question: Is OneUnited Bank an authorized SBA lender?

Answer: Yes. OneUnited Bank is a Preferred SBA 7A lender and is authorized to participate in the Paycheck Protection Program (PPP). We are offering PPP loans to our existing and new OneUnited Bank customers through online banking.


Question: What is the Paycheck Protection Program?

Answer: The Paycheck Protection Program (PPP) is part of the Coronavirus Aid, Relief and Economic Security Act (CARES) Act to offer small business (< 500 employees) loans to support payroll and certain other expenses. Loans are available for up to 2.5 times your average monthly payroll during the year preceding the application, with a maximum loan of $10 million. If employers maintain their payroll and use loan funds for allowed expenses like payroll, rent and utilities for the first 8 weeks after the loan is issued, the loan amount is forgiven. The PPP is retroactive to February 15, 2020.


Question: Is my business eligible?

Answer: If you are a OneUnited Bank customer, a small business as defined below and were operational as of February 15, 2020, you are eligible for a PPP loan with OneUnited Bank:

  • a small business with fewer than 500 employees, regardless of revenue
  • a small business that otherwise meets the SBA’s size requirements
    sole proprietors, independent contractors, and self-employed individuals who regularly carry on any trade or business, including those in the “gig economy”
  • a hospitality or food service business (those with an North American Industry Classification System (NAICS) code beginning with 72) if it has fewer than 500 employees per physical location
  • a non-profit entity under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (Internal Revenue Code), so long as that entity has fewer than 500 employees
  • a veterans organization under Section 501(c)(19) of the Internal Revenue Code that meets the SBA’s size requirements
  • a tribal business entity that meets the SBA’s size requirements


It is important to note that the SBA applies complex affiliation requirements, which generally require a business to aggregate all of its parent companies, affiliates, and subsidiaries in determining whether the business meets the small business size requirements and borrowing criteria. These affiliation requirements still generally apply under the PPP, except that they are waived for:

    • a hospitality or food service business classified under an NAICS code beginning with 72
    • a business operating as a franchise that has an SBA assigned franchise identifier code
    • any entity that receives financial assistance from a company licensed under Section 301 of the Small Business Investment Act of 1958, as amended


Question: Who is not eligible for a PPP loan through OneUnited Bank?

Answer: Certain business types are not eligible for a PPP loan due to SBA or OneUnited Bank guidelines. Here is a list of ineligible businesses.


Question: How much funding can I access?

Answer: We have powerful features such as BankBlack Early Pay, so you can get paid up to 2 days early with direct deposit and our BankBlack Card which represents the power of our $1.3 trillion in annual spending. We also offer Holographic Tap-to-Pay Visa Debit Cards that include radiant images to reflect the power of our dollars and “contactless” technology so you can simply tap your card to make purchases and be on your way in seconds.


Question: How can I use a PPP loan?

Answer: You can use the loan to fund payroll costs, employee salaries, costs related to the continuation of group healthcare benefits during paid leave (sick, family or medical), insurance premiums, mortgage interest payments, rent, utilities and interest on any other debt obligation incurred before February 15, 2020.


Question: What information do I need to provide to apply?

Answer: Here is a list of documentation you may need. Documents required vary by business type.


Question: Do I need to pledge any collateral for these loans?

Answer: No collateral is required.


Question: Do I need to personally guarantee this loan?

Answer: 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.


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

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


Question: Can I get a PPP loan if I have other SBA loans?

Answer: Borrowers may apply for PPP loans and other SBA financial assistance, including Economic Injury Disaster Loans (EIDLs), 7(a) loans, 504 loans, and microloans and also receive investment capital from Small Business Investment Corporations (SBICs). However, you cannot use your PPP loan for the same purpose as your other SBA loan(s). For example, if you use your PPP to cover payroll for the 8-week covered period, you cannot use a different SBA loan product for payroll for those same costs in that period, although you could use it for payroll not during that period or for different workers.


Question: Can I get more than one PPP loan?

Answer: Each Taxpayer Identification Number is only eligible for one PPP loan. There is no limit to the number of lenders you can apply with, BUT you can only receive one PPP loan.


Question: What if I have multiple businesses?

Answer: At this time, OneUnited Bank can only process one application/EIN/one deposit account per email address. If you have multiple businesses that do not fit that criteria, we recommend applying at other eligible lenders.


Question: How long will this program last?

Answer: Although the program is open until June 30, 2020, we encourage you to apply as quickly as you can because there are a limited amount of funds available, and the program is first-come first-served.


Question: Are there any origination fees or other fees?

Answer: No. It’s free to apply for a PPP loan and there are no origination fees. Please be wary of any third party that asks you to provide up-front fees to apply for PPP loans as the SBA guidance explicitly prohibits such fees.


Question: If I apply and am eligible, am I guaranteed a loan?

Answer: Program funds are limited. We cannot guarantee that your application will be processed and submitted before SBA funding is no longer available. Applying with OneUnited Bank does not limit you from applying with other lenders and/or platforms.


Question: What if I haven’t filed one of the 2019 IRS forms requested?

Answer: Even if you haven’t filed a requested form, you should work with your CPA or refer to your tax software to fill it out and submit it for your loan application. Since 2019 payroll forms like 940, 941 and W3 weren’t included in the COVID-19 extension, they should be filed and submitted as part of your application.


Question: Can I submit a K-1 as proof of payroll?

Answer: No, that is considered owner’s draw compensation and is not considered payroll. Sole proprietors should submit Form 1040 with Schedule C attached.


Question: I have an LLC with several employees, but I do not file a W2 on myself as the owner. Am I included in the payroll calculation?

Answer: No, if you are an LLC, take draws from the company and file on your 1040, that is not included in the payroll calculation.


Question: What if I have a single-member LLC?

Answer: You will submit your Form 1040 with Schedule C to verify payroll.


Question: What documents are considered organizational documents?

Answer: Examples of organizational documents include: Articles of Incorporation, Certificate of Existence, Certificate of Organization, State LLC Agreement, Certificate of Formation, or the Articles of Information. (This does not apply if you are a sole proprietor or independent contractor.)


Question: What goes into the payroll calculation if I am not a seasonal business and not a sole proprietors or independent contractor?


      • Any salaries, wages, commissions, tips and bonuses, including severance pay found on W3 (excluding contractor pay and owner draw compensation)
      • Any paid leave (no FFCRA paid leave) found in 940 or 944 and/or monthly payroll statements
      • Employee-paid state and local taxes found in W3
      • Employee-paid group health benefit contributions found in uploaded statements
      • Employee-paid retirement contributions
      • W2 for any employee making over $100K and/or living abroad
      • EIDL statement if you are refinancing it through the PPP


Question: What goes into the payroll calculation if I am a seasonal business?


      • Salaries, wages, commissions, tips and bonuses, including severance pay found in 941s for every quarter you were in business and/or monthly payroll statements
      • Any paid leave (no FFCRA paid leave) found in 940 or 944 and/or monthly payroll statements
      • Employee-paid state and local taxes found in state returns and/or monthly payroll statements
      • Employee-paid group health benefit contributions found in uploaded statements
      • Employee-paid retirement contributions
      • W2 for any employee making over $100K and/or living abroad
      • EIDL statement if you are refinancing it through the PPP


Question: What if I don’t have any employees?

Answer: For Sole Proprietors, single member LLCs and self-employees we will need:

      • 1040 Schedule C
      • Payroll statements (where applicable)
      • EIDL statement if you are refinancing it through the PPP

For Independent contractors we will need 1099s (and proof of payment such as paid invoices)


Question: What if I don’t have those payroll documents?

Answer: OneUnited Bank will not be able to submit your application to the SBA if we can’t verify your payroll costs through this documentation.


Question: If I am a Sole Proprietor or Independent Contractor, what time period should I request monthly payroll statements from my payroll provider?


      • Seasonal businesses: February 15, 2019 – June 30, 2019
      • Seasonal businesses (as defined above) that were in business for at least eight weeks between Feb 15, 2019 – June 30, 2019 but weren’t back in business by Feb 15, 2020, don’t count as a “new business” and should select the above period for seasonal businesses.
      • Newly formed businesses: not formed before February 12, 2019, use January 1, 2020 – February 29, 2020


Question: Can I withdraw my application?

Answer: Yes, please email us at [email protected] from the email address associated with your application with your request to withdraw.


Question: Will my PPP loan be forgiven?

Answer: Yes, the loan amounts will be forgiven as long as:

      • The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and
      • Employee and compensation levels are maintained.


Question: How much of my PPP can be forgiven?

Answer: The amount of your loan that is forgiven is equal to the amount you spend during the 8 weeks following loan origination toward eligible expenses, including:

      • Payroll costs (using the same definition of payroll costs used to determine loan eligibility)
      • Interest on the mortgage obligation incurred in the ordinary course of business
      • Rent on a leasing agreement
      • Payments on utilities, including electricity, gas, water, transportation, telephone and Internet access for service that began before February 15, 2020
      • Additional wages paid to tipped employees

Not more than 25% of the forgiven amount may be for non-payroll costs. Forgiven amounts will not be considered cancellation of indebtedness income for federal tax purposes.


Question: Can the amount forgiven be reduced?

Answer: The amount of loan forgiveness is reduced if there is a reduction in the number of employees, or a reduction of more than 25% in wages paid to employees. Reductions in the number of employees or compensation occurring between February 15, 2020, and April 26, 2020, will generally be ignored if the action (layoff or salary reduction) is reversed by June 30, 2020.


Question: How can I request loan forgiveness?

Answer: You can submit a request to OneUnited Bank by providing:

      • Documentation verifying the number of employees on payroll and pay rates, including IRS payroll tax filings and state income, payroll and unemployment insurance filings
      • Documentation verifying payments on covered mortgage obligations, lease obligations and utilities
      • Certification that the amount that is being forgiven was used in accordance with the program’s guidelines for use

OneUnited Bank must make a decision on the forgiveness within 60 days.


Question: If my loan amount covers 2.5x my monthly payroll and other costs, but only eight weeks of those expenses are forgivable, will I owe the remainder?

Yes, the Act allows for a maximum forgiveness of 8 weeks of approved costs. The remainder will be treated as a loan. Remember that the approved costs subject to forgiveness are broader than just payroll, and also include mortgage interest, rent and utilities.


Question: What is my interest rate?

Answer: Loans through PPP have a fixed interest rate of 1%.


Question: When do I need to start paying interest on my loan?

Answer: All payments (principal, interest and fees) are deferred for 6 months; however, interest will continue to accrue over this period.


Question: When is my loan due?

Answer: The loan is due in 2 years, but you can repay early without any prepayment penalties or fees.


Question: What interest expenses are considered eligible?

Answer: Any business-related interest payments on a mortgage or other debt obligation (excluding any prepayment or principal obligation) that was incurred before February 15, 2020.


Question: What rent expenses are considered eligible?

Answer: Payments for business-related rent under a leasing agreement that was in force before February 15, 2020.


Question: What utility expenses are considered eligible?

Answer: Payments for business related utilities (for the distribution of electricity, gas, water, transportation, telephone, or internet access) for which service began before February 15, 2020.


Question: What counts as payroll costs?

Answer: Payroll costs include:

      • Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee) for employees whose principal place of residence is the U.S.
      • Employee benefits including costs for vacation, parental, family, medical, or sick leave allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit
      • State and local taxes assessed on compensation

For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee


Question: Are any payroll costs excluded?

Answer: Yes, the following payroll costs are excluded:

      • Any compensation of an employee whose principal place of residence is outside of the United States
      • The compensation of an individual employee in excess of an annual salary of $100,000, prorated as necessary
      • Federal employment taxes imposed or withheld between February 15, 2020, and June 30, 2020, including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be withheld from employees
      • Qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (Public Law 116–127).
      • Contractor pay (i.e. any issued 1099s)
      • Payroll reimbursements
      • Owner’s draw compensation (except for sole proprietors)
      • Worker’s compensation fees
      • Fringe benefits (i.e. commuter benefits, HSAs)
      • Ancillary benefits (i.e. short-term disability, long-term disability, life insurance)


Question: Do independent contractors count as employees for purposes of PPP loan calculations?

Answer: No, independent contractors have the ability to apply for a PPP loan on their own so they do not count for purposes of a borrower’s PPP loan calculation.


Question: What is the maximum recoverable salary for each employee?

Answer: For any employee whose salary is $100,000 or more, only $8,333 per month can be included in the calculation of average monthly payroll costs, in addition to that employee’s cost of health and retirement benefits and state and local taxes prorated for the covered period.


Question: How can PPP loans be used?

Answer: In addition to the approved uses for a Section 7(a) loan made in the ordinary course, a PPP loan may, for the period from February 15, 2020 to June 30, 2020, be used for the following:

        • payroll costs;
        • insurance benefits;
        • employee salaries, commissions, or similar compensation;
        • mortgage payments;
        • rent payments;
        • utilities;
        • interest on existing debt; and
        • as noted above, to repay or refinance an EIDL incurred by the borrower between January 31, 2020 and the date on which PPP loans become available.