Bank Of America, seeking to use the Paycheck Protection Program as a way to get current clients the help they need during this COVID-19-marked time, just sent an interesting email. It seeks present a version of the CARES Act Paycheck Protection Program to help current clients who have loans or lines of credit, but it seems to reject those who do not. That should change, given the situation. Anyway, here’s the letter.
Bank of America expands support for clients with new Paycheck Protection Program
Over the past several weeks, Bank of America has been providing support to our customers and clients through our enhanced Client Assistance Program.
In addition, beginning April 3rd, our Small Business clients may also be eligible for financial relief through the federal Paycheck Protection Program that is being introduced as a result of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The Paycheck Protection Program is a federal relief program established by Congress and implemented by the U.S. Treasury Department and the Small Business Administration (SBA) with rules, requirements, protocols and processes that all participating banks, including Bank of America, must follow.
In order to ensure an orderly flow of these government-provided funds, we will follow the intent of the U.S. Treasury guidance, including what has been posted at the U.S. Treasury website, that small businesses that plan to apply should do so with their current business loan provider.
Small Business clients with a business lending and a business deposit relationship at Bank of America are eligible to apply for the Paycheck Protection Program through our bank. A client’s pre-existing lending relationship with us may be a Bank of America Business Credit Card, small business line of credit or business loan.
Small Business owners who do not have both a business lending and business deposit relationship with us should contact their current business loan provider as soon as possible, if they plan to apply for the federal Paycheck Protection Program. This is the best and fastest method for applying for federal relief, based on the U.S. Treasury requirements and guidance.
All applications, information and correspondence about the Paycheck Protection Program at Bank of America will occur online and through email, including the application process, submission of required documents, and follow up correspondence.
Eligible clients who plan to apply for the Paycheck Protection Program loan should be aware of the following important items:
You must have a pre-existing business lending and business deposit relationship with Bank of America, as of February 15, 2020. A Business Credit Card, line of credit or loan may be the lending product used.
At Bank of America, the federal Paycheck Protection Program will be administered online only.
Clients must have a Business Online Banking account. If you do not currently have a Business Online Banking account you must sign up for Business Online Banking as soon as possible.
Apply for the federal Paycheck Protection Program at www.bankofamerica.com/SBResources beginning on Friday, April 3rd.
After completing the application process, you will receive online confirmation of the submission.
Bank of America will process your application as soon as possible.
We will contact you with next steps and to collect any required documents. Do not proactively deliver or send documents to our Financial Centers or banking teams.
You will be notified of the status of your loan application through email communications.
Information about your application status will NOT be available through our Financial Centers or Contact Centers — due to the nature of this loan process and the steps involved.
To prepare for your application process, review requirements listed on the U.S. Treasury website. These include:
2019 Payroll — total payroll for full year 2019, by employee, as reported to the IRS
2019 Independent Contractor Costs — Listing of 1099’s-MISC for 2019 independent contractors, by person, as reported to the IRS (Note: Do NOT include 1099’s for services)
Payroll report as of February 15, 2020 or closest date after that date, by employee
Under the CARES Act, the federal Paycheck Protection Program includes the following components:
The program will be available to businesses with 500 or fewer employees to help with payroll, rent, utilities, healthcare costs and more.
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. The loan amount is capped at $10 million.
Loans will be forgiven up to the loan amount for a borrower’s payroll, rent, mortgage, and utility costs incurred and paid during an eight-week period after a loan is originated.
Loan forgiveness will be reduced to the extent of a) any reduction in employee headcount during this period (as compared to the prior year), and b) any reduction in pay of an employee by more than 25% (as compared to their prior year compensation). Borrowers that rehire workers will not be penalized for paying them less when they are rehired.
The SBA also expanded Emergency Economic Injury Disaster Loans.
Bank of America business lending relationships include small business, commercial or corporate credit cards, conventional business loan or lease, business lines of credit, business auto loans, practice solutions loans, trade and asset-based loans. Clients with these existing relationships have the established accounts and underwriting verifications in place to allow Bank of America to help provide the quickest access to the relief funds and help the U.S. government prevent fraud in the process. There are additional options that may be sources of support for small business owners:
Other Small Business Administration relief programs: The SBA is providing special financing options that small business owners can access via www.SBA.gov/disaster.
Community Development Financial Institutions (CDFIs): CDFIs, also known as local loan centers, are small and typically not-for-profit providers of loans. Bank of America is the largest investor in CDFIs in the United States – with more than $1.6 billion in loans and investments in over 250 CDFIs. On Monday, March 30, Bank of America announced that it will provide up to $250 million in capital to community development financial institutions (CDFIs) by funding loans through the Paycheck Protection Program. In addition, Bank of America will provide up to $10 million in philanthropic grants to help fund the operations of CDFIs. Find a CDFI near you via the CDFI list and locator tool.
Other small business lending providers: If you have a lending relationship at another bank, working with your current provider will be the best and fastest approach.
SBA 7(a) lenders: find a local SBA lender via https://www.sba.gov/funding-programs/loans.
Bank of America continues to provide additional support to our customers and clients through our enhanced Client Assistance Program. Learn more
Head of Small Business