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Frequently Asked Questions
SBA’s Paycheck Protection
Program (PPP)


As of April 16, 2020

The CARES Act expanded the Small Business Administration’s “SBA” Section 7(a) loan program to include the “Paycheck Protection Program” (PPP), which aims to support small businesses. The Bank is actively developing its program to process and submit applications to SBA. Below are some frequently asked questions that may help you understand more about the program.

Question: When can applicants apply for a PPP loan?
Answer: Immediately. A link to the required application is provided below.  Applicants must also complete the Bank's Addendum and Supplemental Information Form. 

Dates for eligible submission are as follows:

  • Friday, April 3rd for small businesses and sole proprietorships
  • Friday, April 10th for independent contractors and self-employed individuals

Question: How do I submit my completed and signed application and Addendum and Supplemental Information form?
Answer: For now, you may submit your application to loans@fnbkemp.com or drop off at one of our drive-thru locations.

Question: How is the maximum loan amount calculated?

  • Maximum loan size is 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
  • Monthly 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; 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
    • It does not include federal payroll taxes

Please Note: You must provide the appropriate documentation to demonstrate previous payroll expenses that shows the specific amount of compensation paid per employee (because of the $100,000 per employee cap noted above)

Question: What documentation is needed from you?
Answer: Other than the PPP application form, the following documents are needed to review your request:

  1. Verification that the business was in operation as of 2/15/2020 (such as a rent check, utilities bill, or bank statement)
  2. Form 941 for each quarter in 2019 (and first quarter of 2020, if available)
  3. Payroll reports for each pay period for the preceding 12 months. If the business uses ADP’s Run module, this report can be found in Reports > Payroll for All Employees
  4. Documentation reflecting the health insurance premiums paid by the business under a group health plan including owners of the company for the immediately preceding 12 months prior to the date of the SBA loan origination
  5. Documentation of all retirement plan funding by the employer for the immediately preceding 12 months
  6. A detailed profit and loss statement for the year ended 2019 and YTD 2020

Question: Can the borrower use the PPP loan funds for any operating expenses?
Answer: PPP loan funds should be used for:

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

Question: How much of the PPP loan will be forgiven?

  • You will owe money when the loan is due if loan funds were used for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. It is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
  • You will also owe money if the business does not maintain its staff and payroll
  • Number of Staff: The amount of loan forgiveness will be reduced if the business decreases its full-time employee headcount
  • Level of Payroll: The amount of loan forgiveness will also be reduced if the business decreases salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019
  • Re-Hiring: The business has until June 30, 2020 to restore its full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020

Question: Which borrowers are best candidates for PPP?
Answer: Any qualified small business may apply. Of note, since the size of PPP loan is based on payroll expenses, businesses with a relatively larger salary expense will see the most benefit.

Question: How does a borrower request loan forgiveness?
Answer: More information will be forthcoming. For now, you can find additional information at SBA.gov.

Key Links:

SBA Paycheck Protection Program

Contact us with any additional questions
loans@fnbkemp.com | (903) 498-8541

Use the Secure Form below to upload your completed application as well as any supporting documentation.

Disclaimer: First National Bank of Kemp is providing this information as a general guideline. Borrowers are encouraged to review program guidelines at SBA.gov and the U.S. Treasury Department to serve as the most up-to-date resources for SBA Lending and the Paycheck Protection Program.

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