COVID-19 Assistance for Business Members


The U.S. Small Business Administration (SBA) established the Paycheck Protection Program (PPP) to support small businesses affected by COVID-19. We’re working diligently with our government partners to process and fund PPP loans on behalf of our business members. We’ll continue to post updates to this page as they become available.

 

Paycheck Protection Program Update

Special Update For Schedule C Filers  Since the SBA revised the loan amount calculation formula for Schedule C Filers, you may choose to use net profits (Schedule C Line 31) or gross income (Schedule C Line 7) as the basis of your PPP loan amount calculation. Using the gross income option may result in a larger PPP loan amount. Please read the application carefully to ensure it’s completed accurately. Errors may increase processing times and delay the SBA review.

Our deadlines may shift depending on application volume, processing capacity and available SBA funding. We encourage you to apply early as there are no guarantees that your application will qualify for a loan or that it will be approved by the SBA before available funds are exhausted.

Navy Federal Deadlines

  • April 23, 2021 at 5 pm, ET: Last day to open a business membership to apply for a PPP loan
  • April 30, 2021 at 5 pm, ET: Last day to submit PPP loan applications
  • May 14, 2021 at 5 pm, ET: Deadline for submitting supporting documentation to complete PPP loan application packages

Navy Federal is accepting PPP applications through our digital portal. For your application to be processed in a timely manner, it’s critical that you read all the instructions on this page so you understand the process and what you’ll need to complete your application. Incomplete application forms and missing documentation will delay processing.

Paper applications won't be accepted. You'll only be able to apply for a PPP loan through the digital portal on our website. From there, you'll be able to track each stage of your loan's status. Our contact center and branches won’t be able to accept PPP applications or provide an update on PPP loans.

We understand small business owners are facing a lot of uncertainty right now, and we’ll work to provide you with the best support for your unique situation. We'll continue to post updates for you here as we receive them.

Eligibility

The following overview of PPP loan application requirements isn't comprehensive. We strongly suggest you refer to the SBA website for detailed information.

To be eligible for a PPP loan through Navy Federal, you must be a Navy Federal business member with a business savings account. The SBA also requires that your business must have been in operation on or before Feb. 15, 2020. 

For the information below, the following definitions apply:

  • First Draw refers to eligible borrowers who haven’t previously received a PPP loan under the original loan program funded by the CARES Act. 
  • Second Draw refers to eligible borrowers who’ve already received a PPP loan and are applying for a second PPP loan through the Economic Aid Act. 
  • Base Period refers to the year new borrowers choose (either 2019 or 2020) to be the time frame used to calculate maximum loan amounts.

First-Draw Eligibility: Eligible First-Draw businesses include Navy Federal business members organized as limited liability companies, corporations, partnerships, some nonprofits, veteran organizations, self-employed individuals, sole proprietorships and independent contractors. Businesses must also meet these requirements:

  • Have 500 or fewer employees (Note: refer to the SBA site for a list of certain business types that must have fewer than 300 employees)
  • Be in operation by or before February 15, 2020 (Note: seasonal businesses will be considered to have been in operation as of February 15, 2020 if the business was in operation for any 12-week period between February 15, 2019 and February 15, 2020)
  • Need a PPP loan to support ongoing business operations because of current economic uncertainty

Second-Draw Eligibility: Eligible Second Draw businesses must meet the eligibility requirements for First Draw loans, and:

  • previously received a PPP loan and have used or will use the full amount by the expected date that a second PPP loan would be disbursed
  • have 300 or fewer employees (unless subject to an exception) as detailed by the SBA
  • experienced a revenue reduction of 25% or greater in a comparative quarter or year-to-year basis in 2020 compared to 2019

If you previously received a PPP loan through another lender, you should consider working with your original lender to apply for a Second Draw loan as it's highly likely they already have the documentation and the SBA loan number required for a Second Draw loan.

If you’d prefer to apply for your Second Draw PPP loan through Navy Federal, you’ll need to ensure that your application includes the required documents listed below in the Second Draw PPP Loans table: “Have or Had a PPP Loan Funded Through Another Lender.” If your application is missing any of the required documentation, it will take longer to process.

Please note: You may not receive more than one Second Draw PPP loan. Any business that previously received a PPP loan and has closed permanently is not eligible for a Second Draw PPP loan. However, a borrower who received a previous PPP loan and only temporarily closed business or suspended operations remains eligible.  

Loan Amount Limits

First Draw: The maximum loan amount for a First-Draw PPP loan is $10 million or an amount calculated using the payroll-based formula provided under the PPP program, whichever is less. 

Second Draw: The maximum loan amount for a Second-Draw PPP loan is $2 million or an amount calculated using the payroll-based formula provided under the Second Draw PPP program, whichever is less.

Please note: Borrowers are prohibited from using PPP loan funds for lobbying activities as defined in the Lobbying Disclosure Act. Review the SBA PPP page for more information on how to calculate your desired loan amount.

 

How to Apply

In order for your application to be processed in a timely manner, it’s critical that you read all the instructions on this page so you understand the process and what you’ll need to complete your application. Incomplete application forms and missing documentation will delay processing.

  1. If any ownership or entity structure changes have occurred since joining as a Navy Federal business member, contact our business membership team at 1-877-418-1462, Mon.-Fri., 9 am to 5 pm, ET to update your information.
  2. Gather electronic copies of all the necessary documents ahead of time so they’re ready to be uploaded with your application. 
  3. Complete all fields in the PPP application. Some questions ask that you supply the information on a separate sheet and mark it as an addendum (A, B, etc.). 
  4. Make sure you upload these and all required documents listed below. You’ll receive confirmation your application has been received.

Documents Required

The SBA is still working on their final guidelines. The information we have to date indicates you must provide the supporting documentation listed below, based on your business type and whether the request is for a First Draw or a Second Draw PPP loan. We suggest you check the SBA’s website frequently for updates.

First Draw PPP Loans

For all entities, additional document requirements will be determined on a case-by-case basis.

For a Corporation, Partnership, Multi-Member LLC or Single-Member LLC With Employees, Sole Proprietorship With Employees
  • Payroll summary for 2019 OR 2020 that includes the following for each employee:
    • gross wages
    • health care benefits
    • retirement benefits
    • taxes paid by the employer (includes the officer(s) if paid W-2 wages)
  • W-2 Employer Summary for 2019 OR 2020. The W-2 Employer Summary must be supplied for the tax year indicated on the 940/941 documents.

  • Proof of business operations on or before Feb. 15, 2020. This includes any of the following: bank statement(s) showing business activity from Feb. 2020, Q1 2020 Profit and Loss (P&L), Q1 2020 941 Tax Form, invoice from Feb. 2020 to a customer that shows revenue, etc.

  • One of the following:
    • 2019 IRS Quarterly Form 941 for all 4 quarters
    • 2020 IRS Quarterly Form 941 for all 4 quarters
    • 2019 or 2020 IRS Form 940
    • Vendor-prepared payroll forms for full year 2019 or 2020
  • 2019 or 2020 IRS Schedule C (only needed for Sole Proprietorship With Employees)
For a Sole Proprietorship Without Employees, Single-Member LLC Without Employees, Self-Employed Individual or Independent Contractor
  • Proof of business operations on or before February 15, 2020. This includes any of the following: bank statement(s) showing business activity from Feb. 2020, Q1 2020 Profit and Loss (P&L), Q1 2020 941 Tax Form, invoice from February 2020 to a customer that shows revenue, etc.
  • Either 2019’s or 2020’s IRS Schedule C
501(c)(3) Nonprofit, 501(c)(19) Veterans, Other
  • Proof of business operations on or before February 15, 2020. This includes any of the following: bank statement(s) showing business activity from Feb. 2020, Q1 2020 Profit and Loss (P&L), Q1 2020 941 Tax Form, invoice to a customer that shows revenue, etc. 

Second Draw PPP Loans

Have or Had a PPP Loan Funded Through Navy Federal:

Original Funded PPP Loan Dollar Amount Documentation Required

Up to $150,000

Navy Federal will review your documentation on file and will advise if any additional documentation is needed.

Proof that funds were spent

Over $150,000

2019 and 2020 financial information documenting a minimum 25% revenue reduction 

Navy Federal will review your documentation on file and will advise if any additional documentation is needed.

Proof that funds were spent

If you've received a First Draw PPP loan through Navy Federal in 2021, you'll need to provide proof that all funds from that loan were spent for eligible expenses during the covered period. Please provide a payroll summary/statement or IRS Form 941 for the covered period.

For Schedule C Filers with no employees, you should provide proof that funds were spent on covered operating costs (utilities, mortgage interest, rent); covered property damage costs; covered supplier costs and covered worker protection expenditures.

Have or Had a PPP Loan Funded Through Another Lender: 

NOTE: If your Second Draw PPP loan application is missing any of the required documents listed below, it will take longer to process.

Original Funded PPP Loan Dollar Amount Documentation Required

Up to $150,000

Proof of first draw loan

Proof that funds were spent

All required documents listed above in the First Draw PPP section based on entity type

Over $150,000

2019 and 2020 financial information documenting a minimum 25% revenue reduction 

Proof of first draw loan

Proof that funds were spent

All required documents listed above in the First Draw PPP section based on entity type

If you're a Navy Federal business member who received a First Draw PPP loan from another lender, you'll need to provide proof that all funds from that loan were spent for eligible expenses during the covered period. Please provide a payroll summary/statement or IRS Form 941 for the covered period. 


For Schedule C Filers with no employees, you should provide proof that funds were spent on covered operating costs (utilities, mortgage interest, rent); covered property damage costs; covered supplier costs and covered worker protection expenditures.

Timing

Due to the high demand for these loans, you may experience a delay in processing.

Submitting

Once you've reached the digital banking sign in screen, sign in using your personal Navy Federal credentials. 

Apply Now for a PPP loan

Checking Your Application's Status

It’s easy to check your application’s status or upload documents securely. Just sign in to our digital portal, making sure to use your personal Navy Federal sign in credentials. Once in the digital portal, you’ll see your Loan Tracker and To Do list.  

PPP Loan Forgiveness

Highlights of Forgiveness Requirements

The following is a general overview. Visit the SBA PPP website for more detailed information on requirements, conditions and deadlines.

When You Can Apply for Forgiveness

If you've received a PPP loan through us, we'll email you to let you know when it's time for you to applyPlease note: You’ll need to sign in using your personal credentials.

When planning your forgiveness application timeline, keep in mind that Navy Federal has up to 60 days to process your request and the SBA has up to 90 days to approve Navy Federal’s recommendation.

Please note that the timing could change if there are any new legislative amendments. If there are updates, we’ll email you and post the information on this page.

Requirements for Forgiveness

The SBA will forgive your loan if:

  1. the loan funds are used for eligible expenses, as defined by the SBA, incurred during the covered period
  2. at least 60% of the funds must have been used for eligible payroll-related expenses; up to 40% of the PPP loan may be used for other allowable costs (detailed below)
  3. all employees on the payroll with salary amounts of up to $100,000 as of Feb. 15, 2020 are maintained or restored at the time you apply for forgiveness

The forgiveness conditions above are subject to any change in guidance by the SBA and the U.S. Department of the Treasury. You must provide documentation for how you spent the funds to prove you've complied with the SBA's forgiveness requirements.

Payroll Costs (at least 60% of the funds)

  • Salary, wages, commissions, cash tips
  • Employee benefits such as vacation, parental, family, medical or sick leave
  • Employer-paid state and local taxes
  • Continuation of group health insurance benefits
  • Group life and disability insurance
  • Vacation, medical, parental, family sick leave
  • Retirement benefits

Other Allowable Costs (maximum of 40% of the funds)

  • Interest on mortgage obligations incurred before Feb. 15, 2020
  • Rent payments on leases dated before Feb. 15, 2020
  • Utility costs under service agreements dated before Feb. 15, 2020
  • See the SBA website for more detailed guidance on potentially allowable costs such as certain payments for software or cloud computing services, covered property damage related to vandalism or looting during public disturbances, covered supplier costs and worker protection expenses. 

Factors That Affect Forgiveness

According to the SBA and the U.S. Department of the Treasury, your forgiveness amount may be affected by the following:

  1. Non-Payroll-Related Costs. Your loan forgiveness will be reduced or denied if you use the loan amount for anything other than eligible payroll costs, mortgage interest, rent and utilities payments. No more than 40% of the loan can be used for non-payroll-related costs.
  2. Reduced Staff. Your loan forgiveness may be reduced if you decrease your full-time employee headcount. There are allowable exceptions such as employees turning down an offer to be rehired, an inability to return to Feb. 15, 2020 levels because of COVID-19 restrictions or an inability to find qualified employees.
  3. Payroll Reduction. Your loan forgiveness may also be reduced if you decrease salaries and wages by more than 25% for any employee who made less than $100,000 annualized in 2019. There are allowable exceptions. Please refer to the SBA website for details.
  4. Timeline to Rehire. For First Draw PPP loans made on or before August 8, 2020, you had until Dec. 31, 2020 to restore your full-time employment and salary levels for any changes made between Feb. 15, 2020 and April 26, 2020.

FAQs

Can I apply for a second PPP Loan?

If this is the first time you’re applying for a PPP loan, you may apply once for a First Draw loan. If you were previously awarded a PPP loan in 2020, you may be eligible for a Second Draw loan. See eligibility requirements in the Eligibility section above. Whether you qualify for a First or Second Draw loan, you may only receive one.

Can I submit a paper application instead of filling out the electronic form?

No. Navy Federal will not accept paper versions of either the PPP loan application or the forgiveness application. You must apply through our digital portal on Navy Federal's website.

How do I calculate the amount I should request?

You can refer to the SBA PPP FAQ page for guidance on how to calculate your desired loan amount.

How will I know if my application has been approved?

You can track your application’s status when you sign in to our portal. Make sure you sign in with your personal Navy Federal sign in credentials.

I applied for a CARES Act PPP loan, but didn’t receive one. Do I need to re-apply?

Yes, you must re-apply through our digital portal. The Economic Aid Act is a new program with a new PPP application. Review the Eligibility and Documents Required sections above for further details.

Why is my PPP loan amount different from the amount on my application?

In this case, we offered you the maximum amount, based on the information you provided and the SBA’s requirements. The SBA requires us to use a very specific method for calculating the amount for which you’re eligible. These calculations are based not only on the information on your application, but also on your application’s supporting documentation for average payroll costs and other qualifying expenses. This helps ensure that, if you fulfill all the loan requirements, you’ll be eligible for loan forgiveness.

You may choose to accept this amount or, if you have additional supporting information, you may withdraw your application and start a new one. However, it’s possible that the SBA could reach their funding cap before your new application can be reviewed and processed.

 

If I get a Second Draw PPP loan, can I apply for forgiveness on my first PPP loan simultaneously?

Yes. If you haven’t already started the forgiveness process, we’ll email you when it’s your time to apply.

When can I apply for forgiveness, and where can I find the application?

We're processing forgiveness applications based on the loan’s funding date. When it's time for you to apply, we'll send you an email with a link to your online application. Make sure you sign in to our portal with your personal account credentials (username and password).

What if I accidentally delete the forgiveness email Navy Federal sends me?

First, try checking your email’s trash folder to see if you can locate and/or restore the email.

If you’re still not able to locate or restore the email, give us a call at 1-877-418-1462, Monday through Friday, 9 am to 5 pm, ET, and we can walk you through how to access your application.

Where can I find information on what I’ll need to prepare to apply for PPP loan forgiveness?

We'll publish updates on this page. You also can find more information on the SBA website.

Can I submit a paper forgiveness application instead of filling out the electronic form?

No. The forgiveness application will be electronic and available on our digital portal. Once we email you that, you're eligible to start the forgiveness process, you must use the online application in our digital portal.

Can I apply for forgiveness directly through the SBA?

No. If you were issued a PPP loan through Navy Federal, your application for forgiveness must come through our digital portal.

How will I know if my loan has been forgiven completely or the amount that will be forgiven if I only qualify for partial forgiveness?

We’ll keep you informed about the status of your forgiveness application by email.

How long will it take to find out if my loan will be forgiven?

Navy Federal has 60 days to review forgiveness packages and submit our recommendation to the SBA.

In most cases, after we submit your package and our recommendation, the SBA has 90 days to make a decision.

Is there any information available about the application and what to expect?

The SBA has published the application’s instructions on their website. Our online application will also include guidelines to help you as you’re filling it out. We encourage you to consult your CPA or financial advisor for additional guidance.

The SBA forgiveness application asks for my SBA loan number, the lender number and the authorization number. Where can I find these?

Once we notify you that you’re eligible to apply, sign in through our digital portal and you’ll see the information has been automatically populated in the correct fields.

If our business has more than one owner, will each owner need to submit documents?

No. One set of required documents for the business is sufficient.

Will there be information on Navy Federal’s website to assist me?

Yes, we’ll continue to update this page with more guidance as it becomes available. And, as noted above, each step of the forgiveness application in our digital portal includes helpful guidance from the SBA.

Can I include paying myself as part of the percentage required to be used for payroll costs? How can I prove I paid myself?

Yes. If you pay yourself from your Navy Federal business account, it’s very simple. Just show that funds were moved from the business account to your personal account for regular payroll. Be sure to record the amount as owner compensation on the forgiveness application.

If the SBA hasn’t yet decided whether my loan has been forgiven, will I still need to make the minimum payments by their due dates? Will I have to make payments while waiting for forgiveness?

No. As long as you submit the loan forgiveness application within 10 months of the completion of the covered period, you won’t have to make a payment until after you’ve completed the PPP forgiveness process and only if there’s a balance.

I’ve read in the news that the SBA will allow borrowers to extend their loans from 2 years to 5 years. Do my loan documents need to be modified?

We’ll work with affected borrowers after a determination has been made regarding loan forgiveness. To extend your loan term from 2 years to 5 years, you’ll first need to apply for loan forgiveness when you become eligible, as outlined above. Once that process has been completed and your loan forgiveness amount has been determined, we'll work with you to modify your loan documents, if appropriate.

If your loan is completely forgiven, you won't owe any payments. Therefore, there won’t be a need to modify your loan terms. If your loan isn’t approved for forgiveness, or if it’s only partially forgiven, then we’ll work with you on a modification of the loan term, if you desire a modification.

If my loan isn’t forgiven either completely or partially, when will I have to start repaying it?

No payments will be due until you’ve completed the PPP loan forgiveness process. After the loan forgiveness process is complete, if you have a balance that must be repaid, we’ll contact you to discuss a repayment plan. This may include new loan documents with new terms, payment amounts and a monthly due date.