Small Business Administration Paycheck Protection Program

As business owners like you continue to feel the impact of these unprecedented times, we’re here to help. We’re proud to have served more than 194,000 customers already with Paycheck Protection Program (PPP) loans. Eighty-four percent of our PPP customers had fewer than 10 employees, and our average loan amount of $54,000 was the lowest among all of the participating large banks, showing our commitment to helping the smallest businesses in need. We’ve already contributed over $400 million of PPP loan fees earned by Wells Fargo to our Open for Business Fund that provides grants to non-profit organizations that support small businesses facing COVID-19 challenges, especially those that work with minority-owned small businesses.

Important Paycheck Protection Program (PPP) Updates

We are accepting applications for the PPP loan program.

Eligible applicants will see the PPP loan application link in their Wells Fargo Business Online® or Commercial Electronic Office® (CEO®) account. All PPP loan applicants must have an eligible Wells Fargo business checking account that was opened on or before December 1, 2020, in the name of the business applying for a PPP loan.

Every day we talk to customers like you about the challenges you face and want to help make your PPP loan experience as easy as possible. To support you through the process, we’ve outlined in questions and answers below the key things you need to know and do before you apply for a PPP loan. We encourage you to take a look before you submit your PPP loan application.

As you review the SBA eligibility requirements, these terms are helpful to know:

  • “First Draw PPP Loans” are for first time program participants
  • “Second Draw PPP Loans” are for certain businesses who have previously received a PPP loan

The PPP program is intended to remain open through March 31, 2021 or until the new government funding is exhausted.

PPP-eligible small business borrowers may include small business concerns as defined by the SBA, sole proprietors, independent contractors, self-employed individuals, nonprofit organizations, tribal business concerns, Veterans’ organizations, destination marketing organizations, some news organizations, housing cooperatives and seasonal employers.

The latest round of PPP loan funding provides separate eligibility requirements for First Draw PPP Loan customers vs. Second Draw PPP Loan customers. The SBA eligibility requirements of the PPP program are comprehensive and cover borrower characteristics such as number of employees, type of industry, date of operation, qualifying payroll cost or self-employed compensation, and other requirements. Applicants are responsible for understanding the PPP eligibility requirements and providing accurate information on the PPP loan application. For more information about PPP loan eligibility requirements, please visit the SBA PPP site.

All PPP borrowers must:

  • Have been in operation on February 15, 2020, or have been a seasonal employer that was dormant or not fully operating as of February 15, 2020 but was in operation for a 12-week period between February 15, 2019 and February 15, 2020.
  • Meet all additional SBA PPP eligibility requirements.
  • Have an eligible Wells Fargo business checking account in the name of the business applying for a PPP loan that was opened on or before December 1, 2020 and are enrolled in Wells Fargo Business Online® OR have Commercial Electronic Office® (CEO®) access.

For businesses that will be taking out a First Draw PPP Loan, they also must:

  • Employ 500 or fewer employees or otherwise satisfy size standards contained in the SBA PPP eligibility requirements.
  • Meet all additional SBA PPP eligibility requirements.

For businesses that will be taking out a Second Draw PPP Loan, different or additional eligibility requirements apply. Second Draw PPP Loan customers must:

  • Employ 300 or fewer employees or otherwise satisfy size standards contained in the SBA PPP eligibility requirements.
  • Have used or will use all loan proceeds from their first PPP loan before the disbursement of the second PPP loan.
  • Demonstrate at least a 25 percent reduction in gross receipts during appropriate quarterly or annual time periods
  • Meet all additional SBA PPP eligibility requirements.

The SBA requires lenders to submit a customer’s “PPP First Draw SBA Loan Number” from their previous First Draw PPP Loan when they apply for a Second Draw PPP Loan. Here are a few tips to help gather this number depending on your situation. If you are a:

  • Wells Fargo customer who had a First Draw PPP Loan with us, and you would like to apply for a Second Draw PPP Loan with Wells Fargo – You do not need to obtain or provide a PPP First Draw SBA Loan Number. We will provide this number for you during your application process.
  • Wells Fargo customer who had a First Draw PPP Loan with us, and you would like to apply with a different lender for a Second Draw PPP Loan - You will need to contact us at (844) 304-8911 to request your PPP First Draw SBA Loan Number. This number is not listed on loan documentation provided for your First Draw PPP Loan.
  • Wells Fargo customer who had a First Draw PPP Loan with a different lender, and you would like to apply with Wells Fargo for a Second Draw PPP Loan – Please contact your First Draw PPP Loan lender to request your “PPP First Draw SBA Loan Number.” This number will be required on your Second Draw PPP Loan application.

The SBA provides requirements for how to calculate your maximum loan amount. These requirements are comprehensive.  Applicants are responsible for understanding how to calculate their maximum loan amounts and for providing accurate information on the PPP loan application.  For more information about how to calculate your maximum loan amount, please view the SBA guidance documents for First Draw PPP Loans, or Second Draw PPP Loans.

Additional SBA guidance on First and Second Draw PPP Loans can be found here:

For those First Draw PPP Loan customers who have not previously received a PPP loan:

  • Borrowers can request a loan amount that is based on up to 2.5 times their average monthly payroll costs for the relevant time period.
  • Seasonal employers can borrow an amount based on average monthly payroll costs for a 12-week period between February 15, 2019 and February 15, 2020.
  • The maximum loan amount is $10 million, or $20 million in the aggregate for a single corporate group (as defined by SBA PPP requirements).

For businesses that will be taking out a Second Draw PPP Loan:

  • Borrowers can request a loan amount that is based on up to 2.5 times their average monthly payroll costs for the relevant time period (or 3.5 times the monthly payroll costs for borrowers with a NAICS code beginning with 72 for the accommodations and food services sector).
  • Seasonal employers can borrow an amount based on average monthly payroll costs for a 12-week period between February 15, 2019 and February 15, 2020.
  • The maximum loan amount is $2 million, or $4 million in the aggregate for a single corporate group (as defined by SBA PPP requirements).

Visit the SBA PPP site for additional information.

It is important that you supply all necessary documentation and that your documentation supports your requested loan amount to help prevent your application from being declined.

Be sure your Tax Identification Number (“TIN”) provided or entered in your PPP loan application is accurate. If the business entity applying for the loan has an Employer Identification Number (“EIN”), please use that number as the TIN for your PPP loan application. A social security number may only be used in very limited circumstances, such as when applicants are sole proprietors, independent contractors, or LLCs without an EIN. Please remember that to claim payroll and benefit expenses for more than yourself, you must have and use an EIN when you apply for a PPP loan.

When you apply you will need to provide a requested loan amount. The SBA provides guides on calculating maximum loan amounts by business type.

Please be sure to submit necessary documents shown in the chart below, listed by entity type. This will help ensure that you include documents that support the loan amount you are requesting and to demonstrate that you meet eligibility requirements.  The documents you submit must correspond to the time period you use to calculate your maximum loan amount.

 

Category 1: Self-employed without employees

Category Definition Documents to Justify Requested Loan Amount Documents to Establish PPP Eligibility
Self-employed without employees (includes sole proprietors, independent contractors, LLCs that file a Schedule C and farmers and ranchers that file a Schedule F; does not include partners in a partnership) 2019 or 2020 Schedule C
  • 2019 or 2020 IRS Form 1099-MISC detailing nonemployee compensation received (box 7), invoice, bank statement, or book or record establishing borrower was self-employed in 2019 or 2020
  • 2020 invoice, bank statement, or book of record establishing borrower was in operation on February 15, 2020
Self-employed farmers and ranchers Same as corresponding category above except use IRS Form 1040 Schedule 1 and Schedule F in lieu of Schedule C Same as above

 

Category 2: Self-employed with employees

Category Definition Documents to Justify Requested Loan Amount Documents to Establish PPP Eligibility
Self-employed with employees (includes sole proprietors, independent contractors, LLCs that file a Schedule C, and farmers and ranchers that file a Schedule F; does not include partners in a partnership)
  • 2019 or 2020 Schedule C
  • 2019 or 2020 IRS Form 941/944 or third-party payroll processor reports or W-2s/W-3s
  • 2019 or 2020 state quarterly wage reporting forms
  • 2019 or 2020 Schedule C or records from a retirement administrator (if applicable)
  • 2019 or 2020 Schedule C or records from a health insurance company or third-party administrator for a self-insured plan (if applicable)
Payroll statement or similar documentation from the pay period that covered February 15, 2020 (showing borrower was in operation and had employees)
Self-employed farmers and ranchers Same as corresponding category above except use IRS Form 1040 Schedule 1 and Schedule F in lieu of Schedule C Same as above

 

Category 3: Partnerships

Category Definition Documents to Justify Requested Loan Amount Documents to Establish PPP Eligibility
Partnerships
  • 2019 or 2020 Schedule K-1 (IRS Form 1065)
  • 2019 or 2020 Form 941/944 or third-party payroll processor reports or W-2s/W-3s
  • 2019 or 2020 state quarterly wage reporting forms
  • 2019 or 2020 IRS Form 1065 or records from a retirement administrator
  • 2019 or 2020 IRS Form 1065 or records from a health insurance company or third-party administrator for a self-insured plan
  • With employees: payroll statement or similar documentation from the pay period that covered February 15, 2020 (to establish the partnership was in operation and had employees on that date)
  • Without employees:  invoice, bank statement, or book of record (establishing the partnership was in operation on February 15, 2020)

 

Category 4: Corporations

Category Definition Documents to Justify Requested Loan Amount Documents to Establish PPP Eligibility
S and C Corporations
  • 2019 or 2020 Form 941/944 or third-party payroll processor reports or W-2s/W-3s
  • 2019 or 2020 state quarterly wage reporting forms
  • 2019 or 2020 1120-S (S-Corp) / 1120 (C-Corp) tax return or records from a retirement administrator
  • 2019  or 2020 1120-S (S-Corp) / 1120 (C-Corp) tax return or records from a health insurance company or third-party administrator for a self-insured plan
Payroll statement or similar documentation from the pay period that covered February 15, 2020 (to establish the corporation was in operation and had employees on that date)

 

Category 5: Non-profits

Category Definition Documents to Justify Requested Loan Amount Documents to Establish PPP Eligibility
Non-Profits
  • 2019 or 2020 Form 941/944 or third-party payroll processor reports or W-2s/W-3s
  • 2019 or 2020 IRS Form 990 Part IX
  • 2019 or 2020 state quarterly wage reporting forms
  • 2019 or 2020 IRS Form 990 Part IX or records from a retirement administrator
  • 2019 or 2020 IRS Form 990 Part IX or records from a health insurance company or third-party administrator for a self-insured plan
Payroll statement or similar documentation from the pay period that covered February 15, 2020 (to establish the nonprofit was in operation and had employees on that date)
Other Non-Profits (Religious Institutions, Veterans Organizations, Tribal Businesses; Non-Profits that do not file an IRS Form 990 - typically those with gross receipts less than $50k)
  • 2019 or 2020 Form 941/944 or third-party payroll processor reports or W-2s/W-3s
  • 2019 or 2020 state quarterly wage reporting forms
  • 2019 or 2020 records from a retirement administrator
  • 2019 or 2020 records from a health insurance company or third-party administrator for a self-insured plan
Payroll statement or similar documentation from the pay period that covered February 15, 2020 (to establish the nonprofit was in operation and had employees on that date)

Customers with a Wells Fargo business checking account opened on or before December 1, 2020 will see a link to apply within their Wells Fargo Business Online® or Commercial Electronic Office® (CEO®). PPP loan applicants must have an eligible Wells Fargo business checking account that corresponds to the entity name on the PPP loan application.

Wells Fargo can only accept online PPP applications. We cannot accept printed applications from the SBA, nor applications over the phone or in our branches.

To prevent your application from being declined, it’s critical your documentation and application details are accurate and your documentation supports your requested loan amount. See “What documents and information do I need to apply for a PPP loan?” You will be notified whether your loan is approved or declined through an email and/or letter.

If your application is approved, you will receive an email from Wells Fargo Paycheck Protection Program’s DocuSign system, asking you to review and e-sign the promissory note in the principal amount of your PPP loan.  It’s important that you review and e-sign this document as soon as possible. After you’ve e-signed the promissory note, your loan funds will be deposited into your Wells Fargo business checking account.

If your PPP loan is declined, you can submit a new application as long as you are eligible and provide all the required documentation to support your requested loan amount and loan eligibility.

We will continue to keep applicants updated on their status by email and/or mailed letter. Because all applications are being handled online, our phone and branch bankers unfortunately will not be able to provide updates on the status of your application or reasons why a loan application was declined.

EIDL advances will no longer be deducted by the SBA from forgiveness amounts. Borrowers may be able to refinance EIDL loans funded between January 31, 2020 and April 3, 2020 with their first PPP loan.  Borrowers cannot refinance an EIDL loan with a Second Draw PPP Loan. For any questions related to the SBA EIDL program, or to obtain an EIDL loan payoff amount, contact the SBA Disaster Loan Servicing Center at (800) 736-6048 or refer to the SBA website.

At least 60% of the PPP forgiveness amount must be used for payroll and the remaining funds for non-payroll costs to be eligible to have a loan forgiven. Forgivable expenses include:

  • Payroll costs that may include wages, salaries, retirement contributions, healthcare benefits, insurance premiums, covered leave, and other expenses.
  • Mortgage interest.
  • Rent payments.
  • Utility payments.

Additional eligible expenses added with December 2020 legislation, and are retroactive to any previous unforgiven PPP loans, include:

  • Covered operations expenditure. Payment for any software or cloud computing service that facilitates business operations, product or service delivery, human resources, or accounting, among other things.
  • Covered property damage cost. Cost related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance.
  • Covered supplier cost. Expenditure to a supplier of goods for the supply of goods that are essential to operations when the expenditure is made and is made pursuant to a contract, order, or purchase order in effect prior to taking out the loan. With respect to perishable goods, the contract, order, or purchase order must be in effect at any time during the covered period.
  • Covered worker protection expenditure. Operating or capital expenditure to facilitate the adaptation of business activities to comply with requirements or guidance issued by federal, state, or local authorities in relation to COVID-19, including personal protective equipment.

Please visit the SBA website for a full list of expenses that can be forgiven under a PPP loan.

The PPP loan will accrue interest at an annual rate of 1%. No payment is due during the deferral period, which ends the earlier of:

  • The date when the SBA remits the amount of forgiveness on your loan to Wells Fargo (or informs Wells Fargo that forgiveness is declined); or
  • 10 months after the last day of your covered period, if you have not applied for forgiveness.

If your loan is forgiven, any interest accrued during the deferral period is eligible for forgiveness.

After the deferral period any balance that is not forgiven (including any accrued interest on the unforgiven portion) will become a term loan. Monthly payments will be due up to the maturity date, which is generally:

  • Two years from the date your loan was made if your loan received an SBA guarantee number before June 5, 2020; or
  • Five years from the date your loan was made if your loan received an SBA guarantee number on or after June 5, 2020.

 

PPP loans are eligible to be forgiven, in full or in part, if the SBA’s requirements are met. Borrowers can choose a covered period of any length between 8 or 24 weeks beginning on the date the borrower received the loan proceeds.

Please visit the Wells Fargo PPP Loan Forgiveness Center for additional guidance or resources regarding covered period, eligibility, use of proceeds, application procedures and documentation required to participate. You may also visit the SBA website for additional information.

All forgiveness applications for Wells Fargo PPP loans must be submitted online using the Wells Fargo PPP loan forgiveness application accessible through Wells Fargo Business Online® or Commercial Electronic Office®. We will notify you once the Wells Fargo PPP loan forgiveness applications become available.

If you received a PPP loan through Wells Fargo, your loan numbers will be automatically pre-filled for you within the application. You will not need to have it ahead of time to be able to apply for forgiveness.

To help you prepare for the PPP loan forgiveness application, review the recommended supporting documents on the Wells Fargo PPP Loan Forgiveness Center.

If you’d like to make a complete payoff of your PPP loan and are using Wells Fargo Business Online® or you are a Wealth & Investment Management customer, please call (844) 304-8911. If you are a Commercial Banking customer, please contact your relationship team or call 1-800-AT-WELLS (1-800-289-3557) option 1, and then follow the prompts for loans. If you would like a letter confirming the payoff of your loan, you may request one at the time of payment or afterwards using the same contact numbers provided. Customers requesting a complete payoff of their PPP loan may be responsible for paying all outstanding principal as well as any accrued interest.

According to guidance from the Small Business Administration (SBA), repayment of your PPP loan in full before you apply for loan forgiveness will make your loan ineligible for forgiveness.

Please visit the SBA website for additional guidance or resources regarding eligibility, use of proceeds, application procedures and documentation required to participate.

For previous rounds of PPP loans, a federal court order made information about PPP borrowers available to the public. As a result, PPP loan borrowers could receive fraudulent calls, emails or letters. If you receive a suspicious email or text message, don’t respond, click on links, or open attachments. Please know that we won’t ask for confidential information—such as your card PIN, access code or online banking password—if we reach out to you. Learn more about avoiding scams.