Experiencing Hardship?

Experiencing hardship?
We are here to help.

Please let us know how we may assist you.

BUSINESS FINANCIAL HELP

PAYCHECK PROTECTION PROGRAM (PPP)

Congress recently approved an extension to May 31, 2021, for businesses to apply for the Paycheck Protection Program (PPP), providing an additional two months. The PPP Extension Act of 2021 also provides the Small Business Administration (SBA) an additional 30 days for processing applications after the application submission deadline of May 31 expires. While businesses now have more time to apply, the SBA says that at the current rate of lending the funds appropriated to PPP by Congress might only last until mid-April. We encourage all interested businesses to contact us as soon as possible.

The Paycheck Protection Program is part of the CARES Act passed in March of 2020. A year later, on March 3, 2021, the Small Business Administration (SBA) published changes to some of the original rules and requirements for qualification.

A summary of the changes includes:
  • Revising the loan calculation formula to allow sole proprietors, independent contractors and self-employed individuals who file an IRS Form 1040, Schedule C to calculate loan amounts using gross income instead of net income.
    • This change applies to loans approved after March 3, 2021; previously approved loans cannot be modified.
  • Altering the rules that limit businesses from qualifying who have owners with delinquent student debt or who have certain previous felonies. More specifics on these rules can be found here.

If you have questions or would like to start the application process, please contact your banker or call 800-513-2360. This funding is currently available until May 31, 2021, or until it runs out, whichever is sooner. Please apply no later than May 24, 2021. Learn more at SBA.gov.

 
What is a Paycheck Protection Program (PPP) Loan?
A PPP Loan is a potentially forgivable loan that can be used to help fund payroll costs and other business expenses.
To be considered for full loan forgiveness, PPP borrowers must spend at least 60% of the loan proceeds on payroll costs. The other 40% may be made spent on the following types of eligible costs:
  • Costs related to the continuation of group health care, life, disability, vision, or dental benefits during periods of paid sick, medical, or family leave, and group health care, life, disability, vision, or dental insurance premiums;
  • Mortgage interest payments
  • Rent payments
  • Utility payments
  • Interest payments on any other debt obligations that were incurred before February 15, 2020
  • Refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020
  • Expenditures to suppliers that are essential at the time of purchase to the borrower’s current operations and made pursuant to certain contracts, orders or purchase orders.
  • Covered operations expenditures, such as payments for any business software or cloud computing service that facilitates business operations; product or service delivery; the processing, payment, or tracking of payroll expenses; human resources; sales and billing functions; or accounting or tracking of supplies, inventory, records, and expenses.
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

PPP Loan Types

Depending on your business situation, there are two different paths to apply for PPP funding.
Who may be eligible?
  • Small businesses that, together with their affiliates, have fewer than 500 employees.
    • Each location of certain news organizations and businesses in the hospitality and food industry could apply, provided that the location employs less than 500 workers.
    • Housing cooperatives, certain 501 (c)(6) organizations, and destination marketing organizations with no more than 300 employees.
    • Entities with more than 500 employees in certain industries that meet SBA’s alternative size standard.
  • Self-employed individuals, sole proprietorships, independent contractors
  • Non-profits, including churches
  • Veterans’ organizations, 501(c)(19) and tribal concerns
Note: All businesses must have been in operation on or before February 15, 2020 and not be permanently closed in order to qualify for PPP.
 
Loan Terms
  • Loan amounts are available up to the lesser of $10 million or 2.5 times the business’s average monthly payroll (with varying calculation methodologies for certain types of businesses).
  • No collateral is required
  • No personal guarantee is required
  • 1% interest rate
  • 5-year maturity
  • Loan payments will be deferred for ten months after the end of your covered period, which is defined as a period between 8 and 24 weeks after your date of disbursement, at the election of the borrower.
Who may be eligible?

You may be eligible to modify your current, First Draw PPP Loan with 1st Source Bank to the maximum eligible amount if your First Draw PPP Loan is with 1st Source Bank, and either:
  • You were previously approved for the maximum eligible amount, and;
    • You returned part or all of the PPP loan funds, or
    • You did not accept the full amount of the PPP loan funds for which you were approved.
  • You did not apply for the maximum allowable amount on your First Draw PPP Loan.
  • You are a partnership and your First Draw PPP Loan did not include any amount for partner compensation.
  • You are a seasonal employer and using your choice of 12-week period between February 15, 2019, and February 15, 2020, to calculate average total monthly payments for payroll results in a higher loan amount.
  • You are a farmer or rancher who received a PPP loan before December 27, 2020, and using the formula described in the Economic Aid Act (i.e., calculation based on gross rather than net income) results in a higher maximum loan amount.
 
Loan Terms
  • Loan amounts are available up to the lesser of $10 million or 2.5 times the business’s average monthly payroll (with varying calculation methodologies for certain types of businesses).
  • No collateral is required
  • No personal guarantee is required
  • 1% interest rate
  • 5-year maturity (2-year maturity for First Draw PPP Loans made prior to June 5, 2020)
  • Loan payments will be deferred for ten months after the end of your covered period, which is defined as a period between 8 and 24 weeks after your date of disbursement, at the election of the borrower.
Who may be eligible?
 
Borrowers may be eligible for a Second Draw PPP Loan provided they have:
  • 300 or fewer employees, subject to certain exceptions
  • Used or will use the full amount of their First Draw PPP Loan on eligible expenses on or before the expected date the Second Draw PPP Loan will be disbursed to the borrower.
  • Experienced a revenue reduction of 25% or more in 2020 relative to 2019. This is calculated by comparing gross receipts in any 2020 quarter with the comparable quarter in 2019, or a borrower that was in operation for all four quarters of 2019 can submit copies of its annual tax forms that show a reduction in annual receipts of 25% or greater in 2020 compared with 2019.
Note: All businesses must have been in operation on or before February 15, 2020 and not be permanently closed in order to qualify for PPP.
 
Excluded Entities
  • Permanently closed businesses, though temporarily closed businesses remain eligible.
  • Businesses that have already received a Second Draw PPP Loan.
  • An entity that is ineligible to receive a First Draw PPP Loan is also ineligible for a Second Draw PPP Loan.
Loan Terms
  • Loans amounts are available up to the lesser of 2.5 months of the borrower’s average monthly payroll costs or $2 million in general (except borrowers assigned a NAICS code beginning with 72, who are eligible for 3.5 months of average monthly payroll costs).
  • No collateral is required
  • No personal guarantee is required
  • 1% interest rate
  • 5-year maturity
  • Loan payments will be deferred for ten months after the end of your covered period which is defined as a period between 8 and 24 weeks after your date of disbursement, at the election of the borrower.

APPLICATION PROCESS

There are three phases to applying for PPP funding.
  • If your business is not in good standing with the Secretary of State, please reinstate your business before submitting your application (not applicable to sole proprietors or individual contractors).
  • If you are a sole proprietor, individual contractor or self-employed individual, and are receiving unemployment benefits, please consult with your CPA or attorney with eligibility questions.
  • If you are a seasonal business, you will need to select a consecutive twelve-week payroll period for your loan amount calculations. When submitting your documentation, please clearly indicate the dates of this payroll period.
The entire application process will be digital to allow for a quicker submission to the SBA.
If you have not already indicated to your banker that you are interested in a PPP Loan, you will need to do so in order to access your personalized digital application. If you do not know who your banker is, please contact your neighborhood banking center (1stsource.com/locations or 800-513-2360). Also, please contact your banker should either of the following apply:
  • You are not a current 1st Source Bank client.
    • While it does not need to be completed before you submit your PPP Loan application, you will need to have an open 1st Source Bank checking account prior to closing on your PPP Loan.
  • You have applied for a current First Draw PPP Loan at another financial institution.
Once you receive the DocuSign application link from 1st Source Bank for your PPP Loan, the directions below will help to ensure that the information on your application is accurate and that all requested documentation is received. This will help expedite your application.
  • On the application, the Business Legal Name for a sole proprietor, single-member LLC (owned by an individual) or individual contractor should be the name of the individual owner not the DBA or tradename. The individual SSN is also to be utilized even if the DBA or tradename has an issued EIN number.
  • Documentation will need to be submitted to 1st Source Bank once your application is complete, depending on your type of business as outlined below.
  • After you have submitted your application using DocuSign, your banker will review your application and send you a secure email with instructions on how to submit the following:
    • Applicable documentation below.
    • Addendum A: If you or any owner of your business are an owner of any other business, or have common management (including a management agreement) with any other business, list all such businesses (including their TINs if available) and describe the relationship on a separate sheet labeled as Addendum A.
    • Addendum B: If you received an SBA Economic Injury Disaster Loan between January 31, 2020 and April 3, 2020, please provide details on a separate sheet and label it as Addendum B.
  • If you do not have a business checking account with 1st Source Bank, one must be opened prior to closing on your PPP Loan.

Documentation Requirements for First Draw PPP Loans

 
  1. 2019 (filed) or 2020 (filed or draft) proper federal tax form as follows and all supporting schedules
    1. Sole Proprietor – IRS form 1040 (single member LLC)
    2. Partnership – IRS form 1065
    3. Corporation – IRS form 1120 or 1120s
  2. See #6 below for additional support items that are required.
    1. Supporting documents should be either 2019 or 2020 consistent with submitted federal tax return
  1. 2019 (filed) or 2020 (filed or draft) federal tax return and all supporting schedules
  2. See #6 below for additional support items that are required.
    1. Supporting documents should be either 2019 or 2020 consistent with submitted federal tax return
hr
  1. 2019 (filed) or 2020 (filed or draft) tax return and all supporting schedules, including K-1’s (Form 1065)
  2. See #6 below for additional support items that are required.
    1. Supporting documents should be either 2019 or 2020 consistent with submitted tax return
  1. 2019 Form 990 (filed) or 2020 Form 990 (filed or draft) and all supporting schedules
    1. If you do not file a Form 990, please remit supporting documents for the applicable tax year, 2019 or 2020, for employer health insurance and retirement contributions from a health insurance company or third-party administrator for a self-insured health plan and retirement plan administrator (if applicable)
  2. See #6 below for additional support items that are required.
  1. 2019 (filed) or 2020 (filed or draft) Form 1040 Schedule C [Schedule F if a farmer] and one of the following to confirm self-employment status corresponding to the year of the tax form:
    1. IRS Form 1099-MISC or
    2. invoice from applicant to applicant’s client or
    3. bank statement reflecting applicant’s name and evidence of deposit of payments received from applicant’s client for goods sold or services performed, such as images of deposit items.
  2. The following items must be dated on or near 2-15-20 and are required with either the 2019 or 2020 Schedule C:
    1. IRS Form 1099-MISC or
    2. invoice from applicant to applicant’s client or
    3. bank statement reflecting applicant’s name and evidence of deposit of payments received from applicant’s client for goods sold or services performed, such as images of deposit items.
  3. If your business has payroll employees, see #6 below for additional support documents that are required.
  1. If using 2019 tax information to support your loan request amount, provide the following:
    1. 2019 quarterly 941’s (4 reports)
    2. 2019 year-end detailed payroll report
      1. This should include gross wages, paid time off, paid vacation, pay for family medical leave, payments for group health care benefits, and payment of retirement benefits.
    3. Detailed payroll report for the pay period covering 2-15-20
      1. The first quarter payroll report will not satisfy this requirement.
    4. If using state and local taxes to calculate the loan amount, provide 2019 state Quarterly Wage Unemployment Reporting forms or equivalent payroll processing record.
    5. Supporting documents for all of 2019: Healthcare premiums and retirement contributions (if applicable)
  2. If using 2020 tax information to support your loan request amount, provide the following:
    1. All information above for 2020 instead of 2019 as well as the detailed payroll report for the pay period covering 2-15-20
 

Documentation Requirements for First Draw PPP Loan Modifications

Once your application is completed, in most cases, minimal documentation will be required. Your banker will follow up with documentation requests, if any, after you submit your application.

Documentation Requirements for Second Draw PPP Loans

The Second Draw PPP Loan documentation requirements are different than when you applied for your first PPP Loan. For those applying for a loan of $150,000 or less, documentation is not required at the time of application; however, documentation is required during the forgiveness process. For those applying for more than $150,000, documentation is required at the time of applying for the loan. Click here for a printable Paycheck Protection Program Second Draw and Modifications Loan Request Checklist.
 
  1. 2019 (filed) or 2020 (filed or draft) proper federal tax form as follows and all supporting schedules
    1. Sole Proprietor – IRS form 1040 (single member LLC)
    2. Partnership – IRS form 1065
    3. Corporation – IRS form 1120 or 1120s
  2. See #6 and #7 (as applicable) below for additional support items that are required.
    1. Supporting documents should be either 2019 or 2020 consistent with submitted federal tax return
  1. 2019 (filed) or 2020 (filed or draft) federal tax return and all supporting schedules
  2. See #6 and #7 (as applicable) below for additional support items that are required.
    1. Supporting documents should be either 2019 or 2020 consistent with submitted federal tax return
  1. 2019 (filed) or 2020 (filed or draft) tax return and all supporting schedules, including K-1’s (Form 1065)
  2. See #6 and #7 (as applicable) below for additional support items that are required.
    1. Supporting documents should be either 2019 or 2020 consistent with submitted tax return
  1. 2019 Form 990 (filed) or 2020 Form 990 (filed or draft) and all supporting schedules
    1. If you do not file a Form 990, please remit supporting documents for the applicable tax year, 2019 or 2020, for employer health insurance and retirement contributions from a health insurance company or third-party administrator for a self-insured health plan and retirement plan administrator (if applicable)
  2. See #6 and #7 (as applicable) below for additional support items that are required.
  1. 2019 (filed) or 2020 (filed or draft) Form 1040 Schedule C [Schedule F if a farmer] and one of the following to confirm self-employment status corresponding to the year of the tax form:
    1. IRS Form 1099-MISC or
    2. invoice from applicant to applicant’s client or
    3. bank statement reflecting applicant’s name and evidence of deposit of payments received from applicant’s customers for goods sold or services performed, such as images of deposit items.
  2. The following items must be dated on or near 2-15-20 and are required with either the 2019 or 2020 Schedule C:
    1. IRS Form 1099-MISC or
    2. invoice from applicant to applicant’s client or
    3. bank statement reflecting applicant’s name and evidence of deposit of payments received from applicant’s customers for goods sold or services performed, such as images of deposit items.
  3. If your business has payroll employees, see #6 below for additional support documents that are required.
  1. If using 2019 tax information to support your loan request amount, provide the following:
    1. 2019 quarterly 941’s (4 reports)
    2. 2019 year-end detailed payroll report
      1. This should include gross wages, paid time off, paid vacation, pay for family medical leave, payments for group health care benefits, and payment of retirement benefits.
    3. Detailed payroll report for the pay period covering 2-15-20
      1. The first quarter payroll report will not satisfy this requirement.
    4. If using state and local taxes to calculate the loan amount, provide 2019 state Quarterly Wage Unemployment Reporting forms or equivalent payroll processing record.
    5. Supporting documents for all of 2019: Healthcare premiums and retirement contributions (if applicable)
  2. If using 2020 tax information to support your loan request amount, provide the following:
    1. All information above for 2020 instead of 2019 as well as the detailed payroll report for the pay period covering 2-15-20
  1. Applicant must have experienced a revenue reduction of 25% or greater in 2020 relative to 2019 when comparing one calendar quarter in 2020 with borrower’s gross receipts for the corresponding quarter in 2019 or annually if comparing calendar year 2020 to calendar year 2019.
    1. “Gross Receipts” is defined in the PPP Draw Loan program guidance.
  2. Applicant must provide:
    1. 2019 and 2020 tax returns (filed or draft) if annual calculation is used.
    2. Quarterly financial statements for the 2019 and 2020 quarters if used
      1. If financial statements are not available, applicant may use comparable period bank statements to determine “Gross Receipts” as defined. Applicant must provide bank statements with supporting documents detailing the Gross Receipts calculation.

LOAN FORGIVENESS

When you are ready to proceed with applying for forgiveness, please send an email to ppploanforgiveness@1stsource.com along with your name and the name of your business and we will be back in touch to help you start the process.
 
1st Source Bank will have 60 calendar days from receipt of the completed application to issue a decision and submit your application to the SBA. The SBA will then have up to 90 calendar days from submission to review your application, make a final decision on the application and remit the appropriate forgiveness amount to 1st Source Bank, plus any interest accrued through the date of payment.
 
1st Source Bank is a seven-time Indiana SBA Gold Level Community Lender of the Year recipient. Our business banking team is poised and ready to serve you.
1st Source Bank remains strong, stable, local and personal; we continue to be so now, just as we have for over the past 150 years. Our commitment to the communities we serve helps us understand what needs our local businesses may have during uncertain economic times.
 
If you need assistance with finances for your business due to the current nationwide shutdowns caused by COVID-19, please reach out to us. Please call Customer Service at 800-513-2360 or 574- 235-2000, or reach out to your local banking center.
 
We offer many options to help you out in these times:
 
IN-PERSON APPOINTMENTS ARE AVAILABLE
Simply find the nearest banking center and call them to schedule an appointment. View Locations
 
BUSINESS LOAN OPTIONS
Now more than ever, ensuring the right financing is critical to ensure long-term success. You can review our loan options and apply online, speak to one of our highly qualified loan officers on the phone. View Loans
 
Back to top >
PERSONAL FINANCIAL HELP
During these uncertain times, please know that helping you is our top priority. Let us know how we may assist with your personal finances by calling our Client Services Center 800-513-2360 or 574-235-2000 or call your local banker.

Stimulus Checks

As part of the American Rescue Plan Act of 2021, a third round of Economic Impact Payments (stimulus checks) have been signed into law. For more information, click here.
 
IN-PERSON APPOINTMENTS ARE AVAILABLE
Simply find the nearest banking center and call them to schedule an appointment. View Locations
 
BANK FROM WHEREVER YOU ARE
Access your accounts online, through the mobile app, via text, or over the phone; whatever works best for you! Learn More
 
CONSUMER LOANS AT THE READY
We have the funds and experience to help you meet your needs. Review our options and apply online, over the phone or by appointment. View Loans
 
Back to top >
"Our primary focus is on being here for you. If you need to talk with someone about your financial situation due to the pandemic, please reach out to us to explore options."
- Chris Murphy, Chairman and CEO 
MESSAGE FROM OUR CEO
 
Back to top >