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Paycheck Protection Program-Loan Forgiveness

THE PAYCHECK PROTECTION PROGRAM (PPP) APPLICATION DEADLINE EXPIRED AUGUST 8 


 UPDATE:
 

 OCTOBER 8 - SBA RELEASED A SIMPLER PPP LOAN FORGIVENESS APPLICATIONS FOR $50,000 OR LESS - CLICK HERE TO SEE THE INTERIM FINAL RULE ON SIMPLER PROCESS

 
On the U.S. Treasury website, they further explain that this action streamlines the PPP forgiveness process to provide financial and administrative relief to America’s smallest businesses while also ensuring sound stewardship of taxpayer dollars.
 

“The PPP has provided 5.2 million loans worth $525 billion to American small businesses, providing critical economic relief and supporting more than 51 million jobs,” said Secretary Steven T. Mnuchin.  “Today’s action streamlines the forgiveness process for PPP borrowers with loans of $50,000 or less and thousands of PPP lenders who worked around the clock to process loans quickly,” he continued.  “We are committed to making the PPP forgiveness process as simple as possible while also protecting against fraud and misuse of funds.  We continue to favor additional legislation to further simplify the forgiveness process.”

 
 
 
 
 
 
LOAN FORGIVENESS UPDATE (JULY 2, 2020):
 
This results in an extension for small businesses to apply for the remaining PPP funds until August 8, 2020.  BankSouth continues to process PPP loan applications; call a Relationship Manager at your local branch for more information.
 

Washington, D.C. (July 2, 2020) — Independent Community Bankers of America® (ICBA) President and CEO Rebeca Romero Rainey released the following statement on congressional passage of legislation to extend the Paycheck Protection Program through Aug. 8.

"As the nation's top small-business lenders and leading Paycheck Protection Program participants, community banks will continue working to meet the needs of their customers and local communities.

"Community banks have been an economic lifeline to local communities during the COVID-19 pandemic, including through their participation in the Paycheck Protection Program. Combined, they account for more than 66 percent of PPP loans and 63 percent of the program's approved dollar amount, according to SBA data.

"While community banks will continue supporting their local economies, we are also advocating additional reforms to include in the next COVID-19 relief bill to support small businesses and jobs in rural, suburban, and urban markets. In addition to a more straightforward approach to PPP loan forgiveness, ICBA and community bankers also encourage Congress to advance capital and accounting relief, liability protection, tax reform, agricultural support, and more.

"ICBA and the nation's community banks will continue working with Congress and the Trump administration to implement policies that will help local communities recover economically from the COVID-19 pandemic."

HOW TO APPLY FOR LOAN FORGIVENESS FOR YOUR PPP LOAN:

 
On June 25, 2020, the SBA updated FAQ information pertaining to the Loan Forgiveness Application package with instructions and continues to update regulations and guidance to help borrowers complete their applications and inform lenders of their responsibilities.
 
The form and instructions include:
 
  • Options for borrowers to calculate payroll costs using an "alternative payroll covered period" that aligns with borrowers' regular payroll cycles
  • Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after borrowers received their PPP loan
  • Step-by-step instructions on how to perform calculations required by the CARES Act to confirm eligibility for loan forgiveness.
  • Statutory exemptions fro loan forgiveness reduction based on rehiring by June 30.
  • Descriptions of documents you need to gather (e.g., payroll records, eligible non-payroll costs like rent, mortgage interest, covered business utility payments, etc.
  • The new exemption for borrower whose good faith, written offers to rehire workers were declined.
When to submit your Loan Forgiveness Application:
 
  • The Paycheck Protection Program Flexibility Act of 2020, which became law on June 5, 2020, extended the covered period of loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement, providing substantially greater flexibility for borrowers to qualify for loan forgiveness.  The 24-week period applies to all borrowers, but borrowers that received an SBA loan number before June 5, 2020, have the option to use an eight-week period.¹
  • As of June 25, 2020, the SBA updated its policy regarding the maturity date of a PPP loan.  If a PPP loan received an SBA number on or after June 5, 2020, the loan has a five-year maturity.  If a PPP loan received an SBA loan number before June 5, 2020, the loan has a two-year maturity,, unless the borrower and lender mutually agree to extend the term of the loan to five years. The promissory note for the PPP loan will state the term of the loan.¹
  • BankSouth will notify you in advance of that date that you are eligible to begin the application process. Check back here frequently for additional information regarding electronic submission of your Loan Forgiveness Application.
 
¹ Source: SBA Frequently Asked Questions for Lenders and Borrowers for the Paycheck Protection Program - Effective June 25, 2020