Relief for Small Business
If you received a PPP loan, you may be eligible for forgiveness of all or part of the loan amount. Loan forgiveness is not automatic. You must apply for forgiveness and meet several requirements.
The SBA has released guidance regarding the processing of forgiveness applications, and we are now able to accept applications. We encourage you to learn about the program and begin gathering information to apply.
Legislative amendments were enacted in the “Paycheck Protection Program Flexibility Act,” or PPPFA, that do the following:
- Change the breakdown of 75% - 25% payroll to non-payroll expenses to 60% - 40%.
- Extend the "covered period" from 8 weeks to 24 weeks, while still allowing the borrower to use the originally authorized 8-week period.
- Extend the deferral period for payments of principal, interest and fees to the date on which the amount of forgiveness is determined by the SBA and remitted to the lender. OR, if the borrower does not apply for forgiveness, 10 months after the last day of the “covered period.”
- Expand the safe harbor for rehiring employees by allowing that forgiveness will not be affected by a reduction in employees if the borrower is able to document an inability to rehire individuals, hire similar qualified employees, or to return to the same level of business activity as it was operating at before February 15, 2020.
- Extend the loan maturity minimum to 5 years for all loans on a go-forward basis. Any pre-existing loans may amend the note to reflect new maturity terms if both the lender and borrower mutually agree.
- Allow borrowers with forgiven loans to defer payroll taxes.
- Except for the maturity minimum, all changes apply to new and existing loans.
The PPP program is intended to help small businesses keep employees on payroll. According to the SBA, your PPP loan may be forgiven if the proceeds are used for qualified expenses during the 8- or 24-week period after the funds are received.
- 60% of the loan amount must be used for payroll costs. These include:
- Employee salaries, including bonuses and hazard pay - salary cap is $100,000 per employee.
- Group health care benefits, retirement benefits, and state/local taxes on employee salaries.
- No more than 40% of the loan amount can be used for non-payroll costs in place prior to February 15, 2020. These include mortgage interest, rent and utilities. Advance payments of interest on mortgages will not be eligible for loan forgiveness.
Loan forgiveness requires documentation and we encourage you to begin preparing now. Plan to provide detailed payroll and expense records—proof of these expenses must be provided for your loan to be considered for forgiveness. A tax professional or CPA can help with record-keeping.
Taking the following actions may help your loan qualify for forgiveness:
- Keep disciplined records: Use account codes or sub-codes to create a detailed paper trail for qualified expenses.
- Keep supporting documents: Organize your documentation of PPP fund usage, especially for payroll, interest, rent, and utilities payments.
- Payroll: Retain payroll registers and proof of ACH transfers. If you outsource to a professional employer organization (PEO), save your payroll invoice showing payroll costs and employee benefits.
- Utilities: Keep invoices and statements for electric, gas, water, phone, internet and transportation. Gather documents that show utility agreements were in effect prior to February 15, 2020.
- Rent and mortgage interest: Keep proof of payments (cancelled checks, ACH records, etc.). Gather documents that show utility agreements were in effect prior to February 15, 2020.
Note: The SBA has stated that borrowers must retain PPP documents for at least six years after the date the loan is forgiven or paid in full.
The SBA has released guidance for processing loan forgiveness applications.
We are now able to process forgiveness applications as the SBA’s guidance has been established. Many Paycheck Protection Program Flexibility Act (PPPFA) changes are beneficial to borrowers, and it will be important to allow time for the SBA to implement the new rules prior to submitting your application for loan forgiveness.
- Submit your forgiveness application after the 8- or 24-week period following the date your PPP loan was funded.
- You must submit your forgiveness application within 10 months after the last day of your covered period.
We have begun processing forgiveness applications as SBA guidance for processing them has been established.
At that point, we will review your application within 60 days of receiving it, before submitting it to the SBA. Decisions for full or partial loan forgiveness are made at the SBA’s discretion, and that process may take an additional 90 days.
We have begun processing loan forgiveness applications per the SBA's guidance.
The SBA released two applications for PPP Loan Forgiveness, including a new version called the “EZ Application.” The EZ version may be used for borrowers that:
- Are self-employed and have no employees, OR
- Did not reduce the salaries or wages of their employees by more than 25% and did not reduce the number or hours of their employees, OR
- Experienced reductions in business activity as a result of health directives related to COVID- 19, and did not reduce the salaries or wages of their employees by more than 25%.
Once we have final guidance from the SBA are able to submit forgiveness requests, we will communicate the process for submitting your forgiveness application on this page.
Both applications and instructions are located below:
For more information about the Paycheck Protection Program, please visit the U.S. Small Business Administration's website.