CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was approved and signed into law. The CARES Act has several key provisions that include the Payment Protection Program (PPP), stimulus payments, changes to Individual Retirement Accounts (IRAs), new retirement loan minimums and more.

PAYCHECK PROTECTION PROGRAM (PPP)

For more than 150 years, Frost has served the needs of our customers and been a force for good in our communities. We continue to be here for your business during this challenging time by providing you access to the Paycheck Protection Program (PPP). If your business has fewer than 500 employees, you may be eligible for a loan of up to $10 million to keep your company running.

The CARES Act created a program to help bridge payroll expenses through June 30, 2020. The PPP will be administered by the Small Business Administration (SBA). Frost is participating in this program and will provide loans to our business customers impacted by the current economic environment to assist with covering costs.

We have reopened the application process for the PPP now that Congress has allocated more funding. We’ll continue working hard to seek SBA approval for applicants. We are committed to processing your loan request and providing you with a decision as soon as possible. Please note, PPP funds are limited and may run out before your application is processed.


You will need to complete the SBA’s application for loan forgiveness and submit it to the financial institution that funded your loan. We are not accepting loan forgiveness applications at this time but will begin doing so once the SBA has released comprehensive guidance and details for this process. For more details about how you can begin to prepare, please visit our PPP Loan Forgiveness page.


We are committed to processing your loan request and providing you with a decision as soon as possible. All of us at Frost are working hard to take care of our customers.


Small Businesses

In order for us to complete the processing of your application, we will need you to submit a SBA Paycheck Protection Program Borrower Application Form, plus the following required documents:

S-Corporations or C-Corporations

  • 2019 IRS Form 941 payroll tax reports (or equivalent payroll processor records or IRS Wage and Tax Statements)
  • 2019 state quarterly wage unemployment insurance tax reporting forms from each quarter (or equivalent payroll processor records or IRS Wage and Tax Statements)
  • Payroll statement establishing you were in operation and had employees on February 15, 2020
  • 2019 Business Tax Return (Form 1120 or 1120-S) or other documentation for any retirement or health insurance contributions included in your requested loan amount
  • Please note, IRS Form W-2s and W-3s, or payroll processor reports (including quarterly and annual tax reports) or IRS Form 944, may be used in place of IRS Form 941

Limited Liability Companies (LLCs)

  • LLCs should follow the instructions that apply to your tax filing situations—for example, whether you file as a sole proprietor, partnership or corporation

Partnerships, no employees

  • 2019 IRS Form 1065 including Schedule K-1s and an invoice or bank statement indicating you were in operation on February 15, 2020

Partnerships, and have employees

  • 2019 IRS Form 1065 including Schedule K-1s
  • 2019 IRS Form 941 payroll tax reports and 2019 state quarterly wage unemployment insurance tax reporting forms from each quarter (or equivalent payroll processor records or IRS Wage and Tax Statements)
  • Payroll statement establishing you were in operation and had employees on February 15, 2020
  • Please note, IRS Form W-2s and W-3s, or payroll processor reports (including quarterly and annual tax reports) or IRS Form 944, may be used in place of IRS Form 941

Other documents that may be required include:

  • Entity documents - examples include Certificate of Formation, Articles of Incorporation, Articles of Organization, By-Laws, Company/Operating Agreement, Partnership Agreement and any Assumed Name Certificate filed with the state, if applicable
  • Certificate of fact-status. To obtain a certificate of fact-status, please visit the Secretary of State’s website at https://www.sos.state.tx.us/corp/copies.shtml
  • Certificate of account standing. To obtain a printout of your entity’s franchise tax account status, please visit the Texas Comptroller of Public Accounts website at https://comptroller.texas.gov/taxes/franchise/coas-instructions.php
  • Evidence of borrowing authority — authorizing consents/resolutions establishing who may borrow and sign on behalf of entity

Sole Proprietors, Independent Contractors and Self-Employed Individuals

If you are a sole proprietor, independent contractor or self-employed, you will need to provide the following documents in addition to your SBA Paycheck Protection Program Borrower Application Form. A Frost banker may contact you to request additional documents:

Self-employed, no employees

  • 2019 IRS Form 1040 Schedule C, 2019 IRS Form 1099-MISC, invoice or bank statement establishing you were self-employed in 2019 and a 2020 invoice or bank statement establishing you were in operation on February 15, 2020

Self-employed, and have employees

  • 2019 IRS Form 941 payroll tax reports and 2019 state quarterly wage unemployment insurance tax reporting forms from each quarter (or equivalent payroll processor records or IRS Wage and Tax Statements)
  • A payroll statement establishing you were in operation and had employees on February 15, 2020
  • Please note, IRS Form W-2s and W-3s, or payroll processor reports (including quarterly and annual tax reports) or IRS Form 944, may be used in place of IRS Form 941

Non-Profit Organizations

If you are a non-profit organization, you will need to provide the following documents in addition to your SBA Paycheck Protection Program Borrower Application Form. A Frost banker may contact you to request additional documents:

Eligible non-profit organizations

  • 2019 IRS Form 941 payroll tax reports for all four quarters (or equivalent payroll processor records or IRS Wage and Tax Information)
  • 2019 state quarterly wage unemployment insurance tax reporting for each quarter (or equivalent payroll processor records or IRS Wage and Tax Statements), 2019 IRS Form 990 Part IX, or other documentation for any retirement or health insurance contributions included in the loan amount
  • A payroll statement establishing you were in operation and had employees on February 15, 2020 and any 2019 state quarterly wage unemployment insurance tax reporting forms from each quarter (or equivalent payroll processor records or IRS Wage and Tax Statements)
  • Please note, IRS Form W-2s and W-3s, or payroll processor reports (including quarterly and annual tax reports) or IRS Form 944, can be used in place of IRS Form 941

Non-profit Religious Institutions, Veterans Organizations and Tribal Businesses

  • 2019 IRS Form 941 payroll tax reports for all four quarter (or equivalent payroll processor records or IRS Wage and Tax Information)
  • 2019 state quarterly wage unemployment insurance tax reporting forms from each quarter (or equivalent payroll processor records or IRS Wage and Tax Statements)
  • A payroll statement establishing you were in operation and had employees on February 15, 2020
  • Please note, IRS Form W-2s and W-3s, or payroll processor reports (including quarterly and annual tax reports) or IRS Form 944, can be used in place of IRS Form 941

Other documents that may be required include:

  • Entity documents
  • Evidence of borrowing authority such as authorizing consents/resolutions establishing who may borrow and sign on behalf of organization
HOW TO CALCULATE LOAN AMOUNTS

The Small Business Administration (SBA), in consultation with the Department of the Treasury, is providing guidance to assist businesses in calculating their payroll costs for purposes of determining the amount of a Paycheck Protection Program (PPP) loan businesses can apply for. To help calculate your payroll costs, please refer to the guidance provided in this document.


  • Small businesses, independent contractors, sole proprietorships and self-employed individuals can now apply for and receive loans to cover their payroll and other certain expenses.

If you are an existing Frost Online Banking customer:

  • Gather all of the information and documentation listed in the “What can I do to prepare to apply?” section above.
  • Download and complete the SBA PPP Application form.

    START NOW

  • Once you have gathered all required documentation and completed the SBA PPP Application form, log in to Frost Online Banking and click on “Apply” to the right of the customer account overview page.
  • Follow the application flow and upload the SBA PPP Application form, along with all other required documents, when prompted.

If you do not have access to Frost Online Banking :

  • Gather all of the information and documentation listed in the “What can I do to prepare to apply?” section above.
  • Download and complete the SBA PPP Application form.

    START NOW

  • Once you have gathered all required documentation and completed the SBA PPP Application form, bring the printed form and all required documents to a Frost motor bank near you.

If you are a sole proprietor, individual contractor or self-employed individual using a Frost personal account as your business account, the styling on your account must include a DBA. Your PPP application must be made in your full legal name, and any DBA should be included in the space indicated on the PPP application. For example, a company with an account styling of Jane Smith DBA Jane’s Flower Shop should apply as Jane Smith and include Jane’s Flower Shop in the appropriate space on the application.

If you do not currently have an account with Frost, you will be required to open a checking account with us before applying for a PPP loan.


  • This program is available to all businesses, non-profit organizations, veterans’ organizations, tribal business concerns, sole proprietorships, self-employed individuals and independent contractors with fewer than 500 employees.
    • The SBA typically counts anyone on the payroll as one employee, regardless of hours worked or temporary status.
  • There are limited exceptions for businesses larger than 500 employees if they meet applicable SBA employee-based size standards for those industries.
  • Certain businesses in the food or hospitality industry may be eligible if they have more than 500 employees spread out among different locations, provided each location does not have more than 500 employees.

  • Employee salaries, wages and commissions
  • Paid leave and severance
  • Group health care benefits during periods of paid, sick, medical or family leave and insurance premiums
  • Retirement benefits
  • State and local payroll taxes
  • Interest on mortgage obligation
  • Rent or leases, under lease agreements in effect before February 15, 2020
  • Utilities, for which service began before February 15, 2020
  • Interest on any debt incurred before February 15, 2020

  • Businesses can borrow up to 2.5 times their average monthly payroll from the previous year. You can include U.S.-based contractors and part-time employees in your calculations. However, for the purposes of this loan, payroll is capped at $100,000 per employee.
  • There is a cap of $10 million dollars per business for this loan.
  • For non-seasonal employers, the average monthly payroll is the average total monthly payments for payroll during the one-year period preceding the date of loan origination.
  • For seasonal employers, the average monthly payroll is the average total monthly payments for the payroll period between February 15, 2019 through June 30, 2019, or March 1, 2019 through June 30, 2019, at the election of the borrower.
  • For businesses that were not in operation during February 15, 2019 to June 30, 2019, the average monthly payroll is the average total monthly payments the payroll period between January 1, 2020 to February 29, 2020.

  • This loan has a maturity of two years and an interest rate of 1% APR
  • Loan payments will be deferred for six months
  • Eligible recipients may qualify for a loan up to $10 million determined by eight weeks of prior average payroll plus an additional 25% of that amount
  • If you maintain your workforce, SBA will forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll and certain other expenses following loan origination
  • No prepayment penalties
  • No personal guarantee or collateral guarantee required
  • SBA guaranty fee will be waived

  • February 15, 2020 - your business, mortgage, rental contract or business loan must have been in effect prior to this date.
  • April 3, 2020 - the first date in which small business owners and non-profits can apply for this loan.
  • April 27, 2020 - the first date in which independent contractors, sole proprietorships and self-employed individuals can apply for this loan.
  • June 30, 2020 - the final date to apply for this loan, unless the funds are exhausted prior to this date.

  • If I have multiple businesses, do I need to complete a separate application for each?
    Yes, you will need to submit a separate application for each business.
  • Can I use my 2018 tax return?
    No, please use a 2019 Federal Tax Return if filed, or your complete 2019 financials, including the business’s profit/loss and balance sheet.
  • Will I need an IRS Form 941?
    Yes, if you are required to submit an IRS Form 941 then you will need to provide this to us.
  • Is a spreadsheet with 2019 revenues acceptable?
    No, please provide payroll data.
  • If I cannot provide my 2019 taxes nor documentation of my average payroll, can I still submit my application?
    No, all required documents must be submitted in order for us to make a decision on your loan.
  • Will Frost run a credit report for this loan application?
    No, we will not run a personal credit report for this loan.
  • Where do I get a Certificate of Good Standing?
    To obtain a Certificate of Good Standing, please visit the Secretary of State’s website at https://www.sos.state.tx.us/corp/copies.shtml
  • Is Frost reviewing loan applications on a first come, first served basis?
    As soon as we receive your application and all required documents, we will begin the review process.
  • What is the turnaround time for a decision on my loan application?
    We will work as fast as we can to provide a decision to all applicants as soon as possible.

ECONOMIC IMPACT PAYMENTS

The Internal Revenue Service started sending out Economic Impact Payments (EIP), also known as stimulus payments, to individuals this week. Most stimulus payments will be direct deposited with no additional action required by you, depending on how you previously filed your taxes.

  • If you used a bank account for direct payments to, or to receive refunds from, the IRS your direct deposit may already be in your bank account, or it may be deposited in the coming weeks. People receiving their money first include those who filed tax returns in 2018 or 2019.
  • If you do not have a bank account on file with the IRS, your stimulus check will be sent in the mail to the most recent address on file. Paper checks, issued on Treasury check stock, will begin going out via mail as early as May.

Visit www.irs.gov/coronavirus/get-my-payment for detailed information, including eligibility and payment options, or to check the status of your stimulus payment.

IMPACT TO YOUR INDIVIDUAL RETIREMENT ACCOUNTS (IRA)
  • For the tax year 2020, Required Minimum Distributions (RMDs) have been waived
    • If you have already taken your RMDs for 2020, you will need to include it with your gross income and pay taxes on it
  • You may withdraw from your IRA penalty free, even if you are under the age of 59 ½
  • The deadline for making a 2019 contribution to your IRA has been extended to July 15, 2020
  • The 10 percent IRS penalty for taking early distributions from qualified retirement plans, including IRAs and 401(k)s, has been waived
    • This waiver applies to distributions taken between January 1, 2020 and December 31, 2020 and up to $100,000 of distributions can avoid the penalty
  • The mandatory 20 percent income tax withholding for rollover distributions has been waived.
    • Income taxes on a coronavirus-related distribution can be paid over a three-year period and you also have up to three years to recontribute the amount to a plan or IRA

How to Qualify
To qualify for these IRA withdrawal changes, a distribution must be coronavirus-related. That means that you, a spouse or a dependent must have been diagnosed with COVID-19. You may also qualify if you experienced adverse financial consequences as a result of being quarantined, furloughed, laid off or received reduced work hours due to COVID-19.

NEW RETIREMENT LOAN MAXIMUM

With the enactment of the CARES Act, the maximum loan amount for a retirement plan loan has been doubled to the lower of $100,000 or 100 percent of the vested account balance. This applies to loans secured between March 27, 2020 and December 31, 2020. The due date for the repayment of these loans has also been delayed by a year.

How to Qualify
To qualify for these retirement plan changes, the cause for a loan must be coronavirus-related. That means that you, a spouse or a dependent must have been diagnosed with COVID-19. You may also qualify if you experienced adverse financial consequences as a result of being quarantined, furloughed, laid off or received reduced work hours due to COVID-19.