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Business Customers

Frequently Asked Questions

Business Customers

Frequently Asked Questions

ABOUT THE PAYCHECK PROTECTION PROGRAM

The Paycheck Protection Program was established by the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide small businesses with funds in the form of an SBA guaranteed loan to pay payroll costs and other eligible expenses such as interest on mortgages, rent, and utilities. Paycheck Protection Program (PPP) loans are issued by an SBA registered lender, not the government. With the passage of the PPP Flexibility Act and the Coronavirus Response and Relief Act, business owners now have more flexibility and time to spend their PPP loan funds to be eligible for loan forgiveness.  Some businesses may also be eligible to apply for a PPP Second Draw loan (see below for more details).

A Paycheck Protection Program loan is generally available to businesses with 500 employees or less (see below for eligibility on second draw loans), individuals who operate under a sole proprietorship, as well as 501(c)(3) nonprofit organizations, 501(c)(19) veterans organizations and some Tribal business concerns impacted by COVID-19. The Coronavirus Response and Relief Act expanded PPP loan availability to some additional business types, including certain news organizations, housing cooperatives with no more than 300 employees, some 501(c)(6) organizations and certain bankruptcy debtors. 

The Paycheck Protection Program provides small businesses with funds in the form of an SBA guaranteed loan to pay payroll costs and other eligible expenses such as interest on mortgages, rent, and utilities.  

A Paycheck Protection Program loan includes the following: 

  • Issued by an SBA registered lender, not the government
  • Guaranteed by the SBA
  • Does not require collateral or personal guarantees
  • The interest rate will not exceed 1%
  • Minimum term of 2 or 5 years (depending on application approval date)
  • May be forgiven if used for approved purposes 
  • Payments deferred for borrowers who apply for forgiveness until a forgiveness determination is made by your lender and the SBA 
  • Neither the government nor lenders will charge small businesses any fees

Business owners should be aware that the SBA may change some loan terms or requirements during the loan forgiveness application process. Please note, it is the borrowers responsibility to determine eligibility.

  • Payroll costs, including salary, wages, commissions, tips, employee benefits, state and local taxes on compensation

  • For a sole proprietor or independent contractor: Wages, commissions, income, or net earnings from self-employment

  • Interest on mortgage obligations incurred before February 15, 2020

  • Business rent under lease agreements in force before February 15, 2020

  • Utilities, for which service began before February 15, 2020

  • Per the Coronavirus Response and Relief Act, PPP funds may also be used for certain operations expenditures, property damage costs, supplier costs and worker protection expenditures. For more information, refer to the SBA website

Note:  The amount of loan forgiveness is dependent on the percentage of loan proceeds spent on eligible payroll and nonpayroll costs. The total amount of loan forgiveness can contain no more than 40% nonpayroll costs.

Your maximum loan amount is set by SBA requirements. Generally, the loan amount will be your average monthly payroll costs for 2019 or for the last 12 months multiplied by 2.5. 

If you are seeking a loan increase to your first draw loan, please reference the SBA loan increase eligibility notice, to see if you qualify. You may apply for a loan increase by doing the following,

  • Call your business banker who will have you fill out a form to determine your eligibility.
  • After you complete the form our team will review it to determine your eligibility for a loan amount increase. Your business banker will contact you if there are any follow up questions.
  • Otherwise, your business banker will get back to you within 10 days and provide next steps if it’s determined that you are eligible.
  • Please reach out to your business banker or relationship manager if you have questions. They are here to help you through the loan increase process.

Some adjustments and exclusions apply.

  • Seasonal Businesses:  Per the Coronavirus Response and Relief Act, you may use any 12-week period between February 15, 2019 and February 15, 2020 (previous guidance required using either the period between February 15, 2019 through June 30, 2019 or March 1, 2019 through June 30, 2019)
  • New Businesses:  Businesses not in operation during the period between February 15, 2019 and June 30, 2019 should use the period between January 1, 2020 and February 29, 2020
  • Farmers and Ranchers: Farmers and ranchers who operate as sole proprietors, independent contractors, or self employed individuals and who report income and expenses on a Schedule F may use their gross income in 2019 as reported on Schedule F
  • Restaurant and Food Services: The Coronavirus Response and Relief Act allows Restaurants and Food Services (businesses associated with NAICs code 72) receiving a PPP Second Draw loan the opportunity to multiply their payroll costs by 3.5 over the last 12 months, up to a maximum of $2 million

LOAN APPLICATION PROCESS

Tuesday, May 4th: Based on demand, the Small Business Administration (SBA) Paycheck Protection Program (PPP) funds have run out prior to the closing date of May 31, 2021. Visit the Small Business Administration (SBA) PPP website for the latest information.

Because there are no funds currently available, we are no longer accepting new First or Second Draw PPP loan applications as of 7 pm ET, Tuesday, May 4th, 2021. This includes requests for 2020 First Draw loan amount increases. 

For customers with open applications, we will begin to communicate your PPP loan application status in the coming days.

The time it takes for us to process your application will depend on a number of factors, including the types of documentation you are required to submit. It is important that you complete your application accurately with the required documents. Inaccurate and/or incomplete documentation will impact how quickly we can process the application. Our ability to fully submit your application to the SBA is dependent upon the quality of what you submit.

Loan Processing and Servicing

If your application is approved by the SBA, Capital One will contact you and provide you with a promissory note for execution. That promissory note must be signed and returned to Capital One for you to receive the proceeds of the loan. We will then deposit your loan proceeds into the Capital One business checking or business savings account that is associated with your application. It can take up to several days for the funds to be disbursed to your account. 

If loan funds are not disbursed within 20 days of loan approval because the borrower has not submitted required loan documentation, that loan must be cancelled by the lender.

To make the loan forgiveness application process easier, keep detailed records on how you are spending your Paycheck Protection Program funds. You should consider tracking the funds within your accounting system or whatever way you typically track payroll and cash flow for your business.

We recently updated Capital One business account information, so your Paycheck Protection Program loan will now show up as tied to your account.  You will begin receiving statements for your PPP loan, but if you intend to apply for forgiveness, you will only have payments due after you have completed the loan forgiveness process and only if the SBA determines that you have an unforgiven amount.  If you do not apply for forgiveness within 10 months of the last day of your covered period, then your payments will begin then.

There is no need to make a payment at this time, and your current due date for your first payment should display on your statement or your online banking account. Note that borrowers who apply for loan forgiveness will not need to make a payment if their loan is fully forgiven. 
 
For customers who have a remaining balance after going through the loan forgiveness process, payments will not begin until after the forgiveness determination is made by the SBA, and Capital One will update your statements/online loan information accordingly.

LOAN FORGIVENESS 101: THE BASICS

Yes, but you must apply for forgiveness and demonstrate that you meet the requirements set by the SBA. All loan forgiveness applications are subject to review by the SBA. We recommend you regularly check the SBA website or Treasury website for updates and the latest information on loan forgiveness.

On December 27, 2020, the Economic Aid Act was passed which resulted in several changes to PPP loan forgiveness, including the new streamlined loan forgiveness application, Form 3508S, for borrowers that received a Paycheck Protection Program loan of $150,000 or less. 

We are now accepting 3508S loan forgiveness applications for borrowers that received a PPP loan of $150,000 or less that was funded in 2020, and are beginning to send email invitations to apply. Once you receive your invitation to apply, check the PPP Dashboard of your online application portal to access your PPP loan forgiveness application.  We plan to begin accepting the other PPP loan forgiveness application forms (3508EZ and 3508) in May for borrowers that received loans of all sizes funded in 2020, and will continue to send email invitations to apply at that time. 

Once Capital One has received all of the required information and documents, we have 60 days to evaluate your application for consistency with SBA requirements.  Once we have made our determination, we will submit your application and our determination to the SBA for a final decision. The SBA has 90 days to make its decision.

In the meantime, we strongly recommend that you begin preparing now by carefully reviewing the SBA’s application for Form 3508S. In particular, please closely review:

The sooner you begin to collect the required information and documents, the easier it will be for you to complete our online loan forgiveness application when the time comes. We will provide customers with a document checklist to help with preparation, which will be included in guidance provided before we open our loan forgiveness application.

Please continue to check back here for updates, including when we will begin to accept loan forgiveness applications for loans funded in 2021.

The SBA has several loan forgiveness application options, the Form 3508S, Form 3508EZ and Form 3508. The Coronavirus Response and Relief Act introduced a simplified loan forgiveness application (3508S) for borrowers that received a Paycheck Protection Program (PPP) loan of $150,000 or less, which has been incorporated into our digital application process.

We are now accepting 3508S loan forgiveness applications for borrowers that received a PPP loan of $150,000 or less that was funded in 2020, and are beginning to send email invitations to apply. Once you receive your invitation to apply, check the PPP Dashboard of your online application portal to access your PPP loan forgiveness application.  We plan to begin accepting the other PPP loan forgiveness application forms (3508EZ and 3508) in May for borrowers that received loans of all sizes funded in 2020, and will continue to send email invitations to apply at that time. 

Please continue to check back here for updates, including when we will begin to accept loan forgiveness applications for loans funded in 2021.

The SBA’s loan forgiveness process generally focuses on how you use the proceeds of your PPP loan over a 24-week period beginning after you receive your loan proceeds from Capital One.  You may also elect to apply for loan forgiveness at the end of the 8-week period beginning on the date you receive your loan proceeds from Capital One.  After your chosen period is over and you have collected documents related to costs paid or incurred during that period, you may apply for forgiveness.  Borrowers may apply for forgiveness before the end of the covered period if the borrower has used all of the loan proceeds.

Please consult SBA’s website or Treasury website for additional information.  Note that the requirements may change based on additional SBA guidance.

LOAN FORGIVENESS APPLICATION PROCESS

We are now accepting 3508S loan forgiveness applications for borrowers that received a PPP loan of $150,000 or less that was funded in 2020, and are beginning to send email invitations to apply. Once you receive your invitation to apply, check the PPP Dashboard of your online application portal to access your PPP loan forgiveness application.  We plan to begin accepting the other PPP loan forgiveness application forms (3508EZ and 3508) in May for borrowers that received loans of all sizes funded in 2020, and will continue to send email invitations to apply at that time. 

Please continue to check back here for updates, including when we will begin to accept loan forgiveness applications for loans funded in 2021.

Once eligible,

  • Sign in to your online bank account
  • Select the PPP tile on your account page once you’ve signed in. This will take you to the PPP Dashboard of your online application portal.
  • Select “Start New Application” on the left side of the dashboard to start an application for loan forgiveness.
  • Keep in mind that you can only have 1 application processing at a time.

Commercial customers should work with their relationship manager and sign in using the Document Center login

Refer to the Loan Forgiveness Document Checklist on your PPP Dashboard. It outlines the documentation you’ll need to complete and submit your loan forgiveness application.

Borrowers may submit a loan forgiveness application any time on or before the maturity date of the loan – including before the end of the covered period – if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness.  

However, if a borrower does not apply for loan forgiveness within 10 months after the last day of the covered period, the PPP loan is no longer deferred and the borrower must begin making payments on the loan.

Last Updated 5/4/2021

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