CARES Act Information

Preparing for Your Loan Forgiveness Application

Thank you for choosing F&M Bank to process and service your Paycheck Protection Program (PPP) loan. We hope the funding has positively impacted your business and provided a sense of financial security amid crisis. Your small business makes our community a better place to live, work and play, and it was a great honor to help you obtain loan approval.

Obtaining the loan is just the first step. While there remain some outstanding questions when it comes to the process of loan forgiveness, we wanted to assist you in preparing your application for forgiveness and what required documents may be applicable.

PPP Loan Forgiveness Requirements

As the PPP dictates, loan amounts will be forgiven as long as:

  • The loan proceeds are used to cover payroll costs, and most mortgage interest, rent and utility costs over the 8-week period after the loan is made; and
  • Employee and compensation levels are maintained.

Payroll costs are capped at $100,000 on an annualized basis for each employee. Additionally, not more than 25% of the forgiven amount may be for non-payroll costs. Funds from your PPP loan can be used for the following purposes:

  • Payroll—salary, wage, vacation, parental, family, medical, or sick leave, health benefits
  • Mortgage interest—as long as the mortgage was signed before February 15, 2020
  • Rent—as long as the lease agreement was in effect before February 15, 2020
  • Utilities—as long as service began before February 15, 2020

All expenses falling under these categories are eligible for loan forgiveness. But you must begin preparing now for your loan forgiveness application. We created a general breakdown of how you can begin this process during your 8-week period.

PPP Loan Additional Assistance

As we near the forgiveness period, F&M Bank will you be contacting you with additional information on how to submit your forgiveness application. It is recommended that you consult with your tax advisor, legal counsel or a bookkeeping service to assist your business if necessary.

Any outstanding balance not forgiven will continue to accrue interest at 1% for the remainder of your 2-year loan term period. Generally, there is no prepayment penalty and you can pay off that outstanding balance at any time with no additional fees.

For additional information, please refer to the U.S. Department of the Treasury’s “CARES Act Assistance for Small Businesses” webpage. Additional guidance is anticipated from the Treasury and the U.S. Small Business Administration in the coming weeks.

We are Here for You

F&M Bank is your financial partner – we help you navigate challenge and celebrate in your success. We would like to invite you to continue your banking relationship with our institution after the PPP process has ended and would love the opportunity to continue meeting your financial needs for years to come!

We will continue to stay in touch regarding your PPP loan and the documentation required for loan forgiveness. However, if you have any questions along the way, or would like to discuss personal or business banking solutions, please do not hesitate to contact your loan officer or nearest branch location.