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4 years ago · by · Comments Off on COVID-19 Update: Paycheck Protection Program

COVID-19 Update: Paycheck Protection Program

Starting April 3, 2020, small businesses can apply for the Paycheck Protection Program. The program is designed to keep small business workers employed and provide small businesses with capital through the nation’s banks and other lending institutions.

The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone.

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.
  • Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to the likely high amount of subscriptions, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
  • Loan payments will be deferred for 6 months.

When can I apply?

  • Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
  • Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
  • Other regulated lenders will be available to make these loans as soon as they are approved and enrolled in the program.

Where can I apply?

  • You can apply through any existing SBA lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. Visit www.sba.gov for a list of SBA lenders.

Who can apply?

  • All businesses – including nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply. Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries (click HERE for additional detail).
  • For this program, the SBA’s affiliation standards are waived for small businesses (1) in the hotel and food services industries (click HERE for NAICS code 72 to confirm); or (2) that are franchises in the SBA’s Franchise Directory (click HERE to check); or (3) that receive financial assistance from small business investment companies licensed by the SBA. Additional guidance may be released as appropriate.

What do I need to apply?

  • You will need to complete the Paycheck Protection Program loan application and submit the application with the required documentation to an approved lender that is available to process your application by June 30, 2020. Click HERE for the application.

What other documents will I need to include in my application?

  • You will need to provide your lender with payroll documentation

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

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

How long will this program last?

  • Although the program is open until June 30, 2020, we encourage you to apply as quickly as you can because there is a funding cap and lenders need time to process your loan.

How many loans can I take out under this program?

  • Only one

What can I use these loans for? You should use the proceeds from these loans on your:

  • Payroll costs, including benefits; Interest on mortgage obligations, incurred before February 15, 2020
  • Rent, under lease agreements in force before February 15, 2020
  • Utilities, for which service began before February 15, 2020.

What counts as payroll costs?

Payroll costs include:

  • Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee)
  • Employee benefits including costs for vacation, parental, family, medical, or sick leave; an 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.

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. If you are a seasonal or new business, you will use different applicable time periods for your calculation. Payroll costs will be capped at $100,000 annualized for each employee.

How much of my loan will be forgiven?

  • You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan.
  • Due to the likely high amount of subscriptions, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.

You will also owe money if you do not maintain your staff and payroll.

  • Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount.
  • Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
  • Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.

How can I request loan forgiveness?

  • You can submit a request to the lender that is servicing the loan. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on the eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. The lender must make a decision on forgiveness within 60 days.

What is my interest rate?

  • 0.50% fixed rate.

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

  • All payments are deferred for 6 months; however, interest will continue to accrue over this period.

When is my loan due?

  • In 2 years.

Can I pay my loan earlier than 2 years?

  • Yes. There are no prepayment penalties or fees.

Do I need to pledge any collateral for these loans?

  • No. No collateral is required.

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.***

What do I need to certify?

As part of your application, you need to certify in good faith that:

  • Current economic uncertainty makes the loan necessary to support your ongoing operations.
  • The funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments.
  • You have not and will not receive another loan under this program.
  • You will provide to the lender documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting this loan.
  • Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. Due to the likely high rate of subscriptions, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
  • All the information you provided in your application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program is punishable by law.
  • You acknowledge that the lender will calculate the eligible loan amount using the tax documents you submitted. You affirm that the tax documents are identical to those you submitted to the IRS. And you also understand, acknowledge, and agree that the lender can share the tax information with the SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.

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4 years ago · by · Comments Off on Ten Tips to Stay Cyber-Safe When Working Remotely

Ten Tips to Stay Cyber-Safe When Working Remotely

With the increased number of employees working from home due to the COVID-19 virus, the potential for a cyber incident increases in different ways.

Cybercriminals know that when more people are communicating online, they’re interacting with technology in different ways – even sometimes using networks or software for the first time. Bad actors often attempt to take advantage of such situations, using deception to gain access to protected information. At the same time, corporate IT and operations teams are working overtime to keep networks running without interruption – potentially impacting their ability to detect malicious activity quickly. This makes protecting confidential information more challenging than ever.

Just about any organization that uses technology to do business faces cyber risk. And as technology becomes more complex and sophisticated, so do the threats we face — which is why every business and organization needs to be prepared with both an effective cybersecurity plan, and a cyber liability insurance policy to manage and mitigate cyber risk. Take Your Free Cyber Liability Risk Assessment

Following these ten tips may help your business and your employees stay cyber-safe, even in periods of uncertainty.

  1. Prepare for IT resourcing issues from both a people and a technology perspective.
    • When more people are connecting remotely, technology call centers may face a higher call volume than normal, and more resources may be needed outside of standard business hours. Simultaneously, network bandwidth, data storage capabilities, and computing power are put to the test. Despite this increase in traffic, attention to detail cannot falter. Businesses are encouraged to keep a close eye on these needs, prepare a plan to reallocate resources as necessary,
      and recognize that this dependency may increase over time.
  2. Ensure your network, software, and applications are up-to-date.
    • Remote access technologies have known vulnerabilities – and are all too often the weak link that bad actors use to gain access to protected information. Make sure all software and applications are updated and patch any weaknesses that are identified.
  3. Make sure your resources are aligned – before an incident occurs.
    • Organizations should make sure their business continuity plans, disaster recovery teams, and cyber incident response plans are in alignment. Bad actors know that dependency on your network and its availability is never higher than when more people are accessing it remotely and will attempt to take advantage of the situation.
  4. Review your existing policies, and closely monitor any necessary security exceptions.
    • When IT resources are stretched, organizations may need to make some exceptions to published security policies, standards, or practices. Implement a thorough review process to ensure such exceptions are closely monitored and solved. Also, most work-from-home policies weren’t originally drafted to address a global conversion to remote work; organizations should carefully review those as well.
  5. Only connect to the Internet through a secure network.
    • When connected to a public network, any information you share online or via a mobile app could be accessed by someone else. Always use a Virtual Private Network (VPN) to encrypt your activity. Most organizations provide a VPN to their employees to ensure secure, remote access for work use, and personal VPN accounts are available from various service providers.
  6.  Use strong passwords.
    • Many people use the same or similar version of a password for everything, even between work and home. Unfortunately, this means a single stolen password can be reused on multiple sites to unlock dozens of accounts for hackers. Remembering secure and complex passwords for every account can be difficult, if not impossible. Use password management software to ensure you have strong, unique passwords for everything because passwords are the foundation of sound online security practices.
  7. Use multifactor authentication – now is the time to implement if you haven’t already.
    • Traditional user login and password accounts are easy for bad actors to penetrate. Whenever possible, set up multifactor authentication on your accounts. This requires you to provide at least two authenticating factors, or proofs of identity, before you can access protected data, giving you a second line of defense against criminal activity. This additional level of protection is particularly critical when more people are accessing networks remotely, giving bad actors more entry points to access private networks.
  8. Only click on links, open attachments, and download software from trusted resources.
    • Most people want to stay informed with the latest information, especially during periods of uncertainty. Bad actors know this and will attempt to take advantage by masking malicious links as something informative. Once clicked, that malicious link can be used to gain access to an individual’s or organization’s private information and/or freeze their computers or networks. If you’re unsure of the source, go to the organization’s website. If it’s important, the information will be posted there as well.
  9. Verify website URLs before sharing confidential information.
    • Bad actors can create fake websites where both the URL and homepage look remarkably similar to a site you trust – such as your healthcare provider, bank, or email provider. Instead of following a link in an email, type the URL in by hand. Also, make sure the site you visit has HTTPS in the URL; these sites are more secure than those with HTTP.
  10. Don’t respond to requests for information from unknown sources – especially if the request is for personally identifiable information or passwords.
    • Bad actors will attempt to con people into sharing confidential information by pretending to be someone you know or work with. Take extra care in identifying who you’re sharing information with – even if you think the request came from a trusted resource or organization. Don’t feel rushed; take the time to research the request and whether it’s appropriate before responding.

Regardless of size or industry, Joyce Insurance Group offers a Cyber Liability Insurance Program that can help better protect your business. Contact us today at (570) 655-2831 for your Free Cyber Risk Consultation.

Related articles: Protecting Your Business From Social Engineering, Cyber Liability Insurance Protection

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