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The Paycheck Protection Program (PPP) provides loans to small businesses impacted by COVID-19 to help cover payroll costs and other approved expenses (including rent, utilities, and mortgage interest). The loan is backed by the Small Business Administration (SBA).
PPP is subject to the terms and conditions in the interim final rule(s) and guidance provided by the U.S. Treasury Department and the SBA. For more information, please visit:
If you have already received a PPP loan, you will need to apply for a Second Draw PPP. We cannot accept PPP applications submitted or processed by an agent (including accountants, attorneys, consultants, etc.).
We will accept applications beginning Tuesday, January 19. To get started, please submit a completed PPP First Draw Borrower Application Form and required payroll documentation to your First Interstate Relationship Manager.
What are the loan details?
The loans are fully guaranteed by the SBA and have the following terms:
What businesses are eligible?
Small businesses with 500 or fewer employees—including nonprofits, veterans’ organizations, tribal concerns, certain news organizations, self-employed individuals, sole proprietorships, and independent contractors—are eligible for the PPP. Housing cooperatives, section 501(c)(6) organizations, and destination marketing organizations with 300 or fewer employees also are eligible.
Publicly traded companies and entities receiving a Shuttered Venue Operator Grant are prohibited from receiving PPP funds. A business must have been in operation on February 15, 2020.
What do I need to apply?
Please follow the link to the PPP First Draw Borrower Application Form to complete and sign if you’re requesting a first time PPP loan and return to First Interstate Bank.
Before you start the application process, be sure to gather the necessary documentation to include with the application. Here’s what we need from you to get started:
What is the maximum loan amount? How is it calculated?
Loans may be for up to 2.5 times average monthly payroll costs. Borrowers may choose calendar year 2019 or 2020 to calculate average monthly payroll.
The loans are capped at $10 million and are subject to application approval. Here’s how to calculate the amount for which you are eligible:
How may the loan be used?
PPP loans may be used for the following. At least 60% of PPP loan proceeds must be spent on payroll costs.
Can I apply for more than one PPP loan?
Yes. Certain eligible borrowers that previously received a PPP loan may apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan.
To be eligible for a Second Draw PPP, businesses must have 300 or fewer employees, have used or will use their first PPP loan, and show a 25% loss in revenue in any quarter in 2020 compared to the same quarter in 2019.
Do independent contractors count as employees for the purpose of PPP loan calculations?
No, independent contractors have the ability to apply for a PPP loan on their own so they do not count for purposes of a borrower’s PPP loan calculation.
If a seasonal business was dormant or not fully operating as of February 15, 2020, is it still eligible?
Yes, a seasonal business is 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.
Will I be approved for a PPP loan if my business is in bankruptcy?
No. If you or your business is the debtor in a bankruptcy proceeding, you are not eligible to receive a PPP loan. If you or your business enters bankruptcy after submitting a PPP application, you must notify the lender and cancel your PPP application.
What happens if PPP loan funds are misused?
Any funds not used for authorized purposes must be repaid. Knowingly using PPP funds for unauthorized purposes could result in additional liability such as charges for fraud.
Borrowers who already received a PPP loan may apply for a second loan called a PPP Second Draw. This a new PPP loan and requires submitting a new loan application.
We will accept applications beginning Tuesday, January 19. To get started, please submit a completed PPP Second Draw Borrower Application Form and required payroll documentation to your First Interstate Relationship Manager.
What are the loan details?
The loan terms and forgiveness requirements are the same as a First Draw PPP loan:
Loan payments are deferred for borrowers who apply for loan forgiveness until the SBA remits the forgiveness amount to the Bank. If a borrower does not apply for forgiveness, payments are deferred 10 months after the end of the 24-week covered period from the date of loan disbursement.
What businesses are eligible?
Businesses, certain nonprofit organizations, housing cooperatives, veterans’ organizations, tribal businesses, certain eligible 501(c)(6) organizations, destination marketing organizations, certain nonprofit news organizations, self-employed individuals, sole proprietors, independent contractors, and small agricultural co-operatives are eligible.
To be eligible, businesses must:
*Businesses with multiple locations that are eligible entities under the initial PPP requirements may not have more than 300 employees per physical location.
What do I need to apply?
In addition to a completed and signed PPP Second Draw Borrower Application Form, the following documentation is required.
If you received your PPP loan through First Interstate, we already have most of the documentation required to apply. However, we will need documentation showing a 25% reduction in revenue in any quarter of 2020 compared to 2019. This may include relevant tax forms, including annual tax forms, or, if relevant tax forms are not available, a copy of your quarterly income statements or bank statements.
What is the maximum loan amount? How is it calculated?
Borrowers may receive a loan up to 2.5 times the average monthly payroll costs from calendar year 2020. Accommodations and Food Services Businesses (with an NAICS code 72) may receive up to 3.5 times average monthly payroll.
The loans are capped at $2 million and are subject to application approval. Here’s how to calculate the amount for which you are eligible:
How is the 25% revenue reduction calculated?
To be eligible for a Second Draw PPP Loan, the borrower must have experienced a revenue reduction of 25% or greater in 2020 relative to 2019. This is calculated by comparing the borrower’s quarterly gross receipts for one quarter in 2020 with the borrower’s gross receipts for the corresponding quarter of 2019.
Are Second Draw PPP loans eligible for forgiveness?
Borrowers of a PPP second draw loan are eligible for loan forgiveness equal to the sum of their payroll costs, as well as covered mortgage, rent, and utility payments, covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures incurred during the 24-week covered period. At least 60% of the loan proceeds must be spent on payroll costs in order to receive full forgiveness.
If I apply for and receive a PPP Second Draw, is that amount added to my previous PPP loan or is it a new loan?
The PPP Second Draw is an entirely new loan, separate from your First Draw PPP. You will also separately apply for forgiveness for the Second Draw loan.
Your PPP loan may be eligible for forgiveness if the proceeds were spent on payroll, mortgage interest, rent, or utilities paid or incurred during the 24 weeks after loan disbursement.
If you received a PPP loan through First Interstate Bank, we will email you instructions on how to apply using our online forgiveness application. If you have not received an email, please reach out to your banker.
Forgiveness Applications
The SBA has released three forms and instructions borrowers may use to apply for forgiveness. Please do not complete the PDF version of these applications; First Interstate only accepts applications submitted through our online forgiveness portal. However, it’s a good idea to review the applications to determine which form best meets your needs, as well as what documentation is required.
SBA Form 3508 | SBA Form 3508EZ | SBA Form 3508S
You may submit the 3508S application if your PPP loan or combined loans total $150,000 or less. SBA Form 2508S requires fewer calculations and less documentation.
You may submit the EZ Forgiveness Application if you:
Forgiveness Requirements
For all or a portion of the PPP loan to be eligible for forgiveness, borrowers must:
Expenses eligible for forgiveness include:
The following related expenses are not eligible for forgiveness:
Timing of Expenses
The SBA has allowed some flexibility in timing for the use of PPP funds. Businesses may seek forgiveness for payroll costs paid or incurred during the 24 weeks beginning on either:
The PPP Flexibility Act extended the covered period from eight weeks to 24; however, businesses may choose to use an eight-week period.
Payroll costs paid or incurred during the 24-week period are eligible for forgiveness. Payroll costs incurred during the eight-week period are eligible for forgiveness if paid on or before the next regular payroll date. Otherwise, they must be paid during the 24 weeks. Payroll costs are considered “paid” on the day paychecks are distributed or your business originates an ACH credit transaction. They are considered “incurred” on the day the employee earned the pay. Mortgage interest, rent, and utilities need to be paid during the covered period or paid on or before the next regular billing date, even if the billing date is after the covered period.
Forgiveness Amount Reductions
The forgiveness amount is reduced if the salary or hourly wages of employees who make less than $100,000 annually was reduced by more than 25 percent during the covered period.
The forgiveness amount also is reduced if the business reduces its average full-time equivalent (FTE) employees. The following may be excluded if you didn’t hire a replacement:
The SBA has extended “safe harbor” to businesses that rehire employees by December 31, 2020. You may be exempt from the FTE reduction if these two conditions are met:
Required Documents
When you apply for forgiveness, you will need to submit documents verifying eligible expenses and full-time equivalent employees, as well as each employee’s salary or wages. The SBA requires all records related to your PPP loan be saved for six years after the loan is forgiven or repaid in full.
Please note: Borrowers with a PPP loan or combined loans totaling $150,000 or less may submit SBA Form 2508S, which requires less documentation. However, the SBA requires borrowers to retain the following documents.
Payroll Documentation: You’ll need to include documents verifying the eligible compensation and benefit payments, including:
FTE Documentation: If you reduced the number of full-time equivalent (FTE) employees or you reduced the salary or wages of any individual employee by more than 25%, you’ll need to document:
Documents may include:
If you did not reduce FTE or salary/wages, or you have no employees, you may use Form EZ and this documentation is not required with the application.
Nonpayroll Documentation: You’ll need to verify the existence of a mortgage, lease, or utilities prior to February 15, 2020, and payments made during the forgiveness period:
Business mortgage interest payments
Business rent or lease payments
Business utility payments