Welcome to Your No.1 Community Bank's Blog
January 20, 2021
PPP Round 3 Information
Updated January 20th, 2021
VNB is accepting applications ONLINE ONLY for Round 3 of PPP funding.
No paper applications will be accepted for this round.
*Please note: VNB will be processing PPP Round 3 applications only for current customers, as defined by those who:
Have an active deposit account as of 12/31/2020, and/or
Have an active non-PPP-related loan with VNB.
***If you are a VNB customer (as defined above) and did not apply for a PPP loan in the first two rounds, but would like to apply for Round 3, please contact us as soon as possible at the following email address: VNBPPPadmin@vnb.com
For security purposes, each customer will be asked for three identifying pieces of information in order to log in to the portal. It is CRITICAL that all customers carefully follow the directions shown below, or access will be denied.
- Business TIN
This is the tax ID number of the borrowing business. For sole proprietorships that report income on an individual’s Schedule C of Form 1040, this number may be the same as the owner’s SSN.
- Email Address
This is the email we have on file for the borrower or authorized representative. In many cases, it is the email used for the first PPP loan.
- Authorized Representative Personal SSN
The SSN entered here MUST be that of an owner or authorized representative for the borrowing entity.
NOTE: PLEASE EMAIL US DIRECTLY WITH ANY ISSUES AT: VNBPPPADMIN@VNB.COM
(We recommend using Chrome, Firefox, or Microsoft Edge as your browser)
Due to the volume of applications, we are unable to provide a direct phone line for assistance with the process. Instead, we ask that borrowers who are experiencing difficulties please reach out to our team at the email listed above. Your inquiry will be routed to a member of our PPP team, and they will respond via email or phone call as soon as possible.
Once you have successfully logged into the portal, please reference the FAQs below to proceed.
Round 3 Online Application FAQs:
- Rounds 1 and 2 of PPP refer to the first two disbursements of funding from the SBA that began in April of 2020.
- Round 3 refers to this upcoming funding beginning in January of 2021.
- First-draw: refers to a borrower's first PPP loan (regardless of when it was applied for and received)
- Second-draw: refers to Round 3 funding provided to borrowers who have already received and used the first-draw PPP loan funds
***Please note that each field in the online application has an “information” icon next to it that explains what the field is asking for***
- How much time do I have to submit my application?
The SBA has begun accepting applications from lenders. We will be submitting all completed applications to the SBA as soon as possible.
We suggest completing the application as soon as possible. We will continue accepting applications until the program ends on March 31st, but we expect the funds to run out sooner than that.
- When will I be notified that my application has been approved (or denied)?
The SBA has indicated that they will process the applications quickly, but not as fast as the first two rounds. It may be a few days to a week until the applications are viewed by the SBA after submission, and potentially a few days longer to receive a response. If we hear more detailed timelines, we will communicate this to our borrowers.
- Our loan request is for under $150,000, and I’m told I don’t need documentation. How do I know if my amount is correctly calculated?
It is up to the borrower to correctly calculate average gross monthly payroll costs and utilize this number to apply for the new loan amount.
Because VNB is abiding by SBA guidelines and also working quickly to serve our customer’s needs, we will not be manually verifying each calculation for loans less than or equal to $150,000 until the time of forgiveness. If the borrower submits an incorrect dollar amount, then that borrower should be prepared for the possibility that some of the loan proceeds may not be forgiven.
- I’m finished with the application, and it’s still asking me for documentation even though my loan request is under $150,000. What am I supposed to do?
The online portal will continue to ask for this from all borrowers so that each borrower has the option of uploading any pertinent documentation related to their loan request. We realize it seems strongly-worded in the portal, however, if your loan request is less than or equal to $150,000, you are not required to provide any documentation until the time you apply for forgiveness of the loan. If your loan request is for an amount above $150,000, both payroll documentation and revenue documentation are required.
- I want to use 2019 payroll data, but I forget the monthly payroll figure. What should I do?
For second-draw borrowers who are opting to utilize 2019 payroll data to determine their loan request amount for Round 3, it is important that the “Calculated Loan Amount” field match the amount of the first PPP loan very closely (i.e., if you’re using the same data, it should logically generate a request for about the same loan amount, within a margin of error). To recall the average monthly payroll number used in the first two rounds, the easiest method is to divide the original PPP loan amount by 2.5.
- My business is a restaurant (or other food service and/or accommodations business) with an NAICS (Industry) Code that begins with 72. How do I alter my payroll calculation from the previous round?
These applicants should calculate their average monthly payroll number from 2019 by dividing their prior PPP loan amount by 2.5 (reversing the original calculation). The loan amount will auto-calculate in the portal based on the NAICS code entered and the new 3.5x multiple (instead of 2.5x) that these business types have been allowed to apply for in this new round.
Please note: If your business has an NAICS code beginning with “72” and it has not been automatically reflected in the business data (and the subsequent calculation), please email us directly at VNBPPPadmin@vnb.com to correct this.
- Why does it ask me for “Annual Revenue” and then later “Gross Receipts”? Aren’t these the same?
There is an “Annual Revenue” field to be completed (it is located immediately following the “Date Business was Established” field). This is separate from the Gross Receipts figure that is entered later in the application. The “Annual Revenue” field is asked only for the purpose of CRA (Community Reinvestment Act) reporting. It has no effect on the borrower’s eligibility and will not be compared to other revenue data in the application, and the borrower may use 2019 or 2020 annual revenue data.
If the borrower chooses to use 2020 data, the average monthly payroll will be a new calculation (see information icon next to this field for help with the calculation).
- It’s asking me for the purpose of the loan (how I plan to use the proceeds). How does this affect my eligibility or approval?
The SBA is asking these questions for second-draw loans, and we believe it is for data-gathering purposes. As long as the applicant chooses “Yes” for the question “Do you plan to use the loan for payroll?”, we believe that the remainder of the answers should not materially affect the borrower’s application and subsequent application for forgiveness.
- What are worker protection expenditures?
These are expenses incurred for the purpose of obtaining personal protective equipment and other business investments (e.g., plastic barriers and cleaning supplies) that were required to comply with federal health and safety guidelines as a result of COVID-19.
- For Business Checking Account Number, what if I’m a sole proprietor and don’t have a separate business account?
Sole proprietors who run their business through a personal account may use that VNB account number in this field and it will be treated as a business account for the purposes of the program.
- Can I have the funds deposited into a non-VNB checking account?
We recognize that some of our borrowers bank with multiple financial institutions. If the borrowing business has a checking account with VNB, the funds will be deposited to that account (pending approval of the loan), and the borrower may move the funds after the deposit. If the borrower does not have a VNB checking account, the borrower may opt to have the money wired out to another financial institution; however, this will cause a small delay in funding as well as incur additional fees for the transaction.
Please note: The funding sheet will not initially allow the borrower to input a routing number and checking account at another institution. Those details must be submitted to us separately, and we will contact you to obtain that information after the loan documents are signed (if applicable).
- The borrowing business has multiple 20%+ owners, but I don’t know all of their tax IDs. Can you provide those or can I leave them blank for now?
Unfortunately, VNB cannot provide this information for security purposes, and the fields may not be left blank. Although only one owner needs to enter the data, all data must be entered completely and correctly. If the other owner(s) are unavailable and/or the information cannot be obtained, the application will not be accepted.
- If I’ve already logged in, why do I have to confirm the authorized representative information at the end of the application?
This is an additional security measure that will help to confirm one’s identity. If, for example, the email address is changed from what is on file (or the email that was used at the login screen), VNB receives a notification that some information has been changed.
How quickly will my loan be funded after I apply?
The SBA has begun approving loans, and we are usually able to fund the loans within 1-3 business days after the loan documents have been signed, returned, and reviewed. This timeline is subject to change based on volume and unexpected delays on the part of the SBA.
We will continue to post some general information (shown below) about the program so that our customers are as well-prepared as possible.
*All of the following information is based on the best available data at the time of publishing. All information included herein is subject to further SBA guidelines, clarification, and related changes. We recommend reviewing the Interim Final Rules (IFRs) recently published by the US Department of the Treasury (links provided below for your convenience):
First and Second Draw PPP Loans
- If you have not previously taken a PPP loan:
You will be able to apply for a PPP loan using PPP loan criteria and terms from previous funding rounds (e.g. up to 500 employees, loans amounts up to $10 million).
- If you have received a PPP loan in Round 1 or Round 2 and are applying for a second PPP loan:
“Second draw” PPP loans, as they are known, have new eligibility requirements intended to assist smaller businesses that were hard hit by COVID restrictions. Generally, the requirements are as follows:
- Business has 300 employees or fewer
- Business experienced at least a 25% reduction in gross revenue in any quarter in 2020 compared to that same quarter in 2019, or at least a 25% reduction in annual gross revenue in 2020 compared to annual revenue in 2019.
- Loan amounts are equal to 2.5 times monthly payroll up to $2 million. Certain industries, such as hotels and restaurants (or all NAICS codes starting with 72), can request loan amounts equal to 3.5 times monthly payroll up to $2 million.
Documents and materials needed to apply:
FOR SECOND-DRAW LOANS:
- Application for loans less than or equal to $150,000:
- No documentation is required at the time of application, but the borrower must make attestations relating to the requested amount and the revenue reduction
- The borrower will be required to provide payroll documentation (similar to rounds 1 and 2 of PPP) at or before the time of forgiveness, as well as
- Documents substantiating a reduction in gross revenues of greater than 25% in either:
- Any quarter of 2020 relative to that same quarter in 2019
- Total 2020 revenue relative to 2019 revenue
- The document must be a statement of revenue and expenses that the borrower uses to keep a record of such data. The following would be acceptable:
- Tax documents (filed or to-be-filed)
- Statement generated from accounting software such as QuickBooks
- Other internally-prepared document generated in MS Excel or other spreadsheet software
- Documents substantiating a reduction in gross revenues of greater than 25% in either:
- Application for loans greater than $150,000:
- Payroll documentation and proof of taxes paid (or filed)
- Quarterly 941 forms (for total wages paid and payroll taxes paid)
- Payroll reports (these are required to determine each employee’s earnings so that we can properly limit employees to the $100K annualized equivalent maximum)
- Borrower may opt to use 2019 data or 2020 data
- Documents substantiating a reduction in gross revenues of greater than 25% (see details above for applications less than $150,000, as this requirement is the same)
- Payroll documentation and proof of taxes paid (or filed)
*IMPORTANT NOTE: If you applied for PPP loan in 2020 with VNB, and we already have these documents (i.e., if you wish to use 2019 data and have already provided those documents to VNB for Round 1 or 2 of PPP), you do not need to re-submit these documents. However, all borrowers will be required to submit evidence of the revenue reduction as noted above.
FOR FIRST-DRAW LOANS:
VNB will need the same documents outlined above, but additionally we will need the following information in order to ensure that the business is added to the SBA portal to receive PPP loans:
- Name of borrowing business
- Tax ID of business
- Name of owner/authorized representative applying
- Email address of owner/authorized representative
- SSN of owner/authorized representative
Eligible expenditures of PPP loan funds
Eligible expenses continue to be 60% payroll costs and 40% non-payroll costs. However, eligible non-payroll expenses have been expanded to now include certain business software or cloud computing services, certain uninsured property damage costs from public disturbances during 2020, certain supplier costs, and certain worker protection expenditures (please see page 49 of IFR 1 linked above).
Clarification of PPP tax treatment
The law includes clarification regarding taxes and eligible expenses and forgiveness. We recommend that you contact your tax adviser or accountant for more details.
Update to Economic Injury Disaster Loan (EIDL) Advance Reduction
According to prior legislation, the forgiveness amount of a PPP loan was required to be reduced by the amount of any EIDL advance received (for those borrowers that received funding from both sources). The current legislation signed on December 27th has repealed this reduction.
If you have already completed forgiveness of your PPP loan, the law states you must be retroactively made whole. If you are a Virginia National Bank PPP customer in this situation, we will be in contact with you once we know more.
Updates to Forgiveness of Existing PPP Loans:
- PPP loan amounts of $150,000 or less:
The new law calls for a streamlined loan forgiveness application that is limited to a one-page certification form that does not require documentation be submitted with your application. We will notify customers once this form is available, and the SBA has expressed that they expect this to occur on or around January 20th..
- PPP loan amounts of more than $150,000:
There are no significant forgiveness changes included in the new law, except for the inclusion of additional non-payroll costs for which PPP funds may be used.
What we expect to know soon:
How long will the funds last?
We are unable to predict how quickly the funds may be exhausted. However, we do expect demand to be high. We know that, per the law, the PPP program will end on March 31st, 2021 and all loan applications must be approved by the SBA on this date, if funds remain.
We understand that PPP loans are a vital lifeline to businesses during the pandemic. We are committed to keeping you informed, and we will update this page regularly.