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The Small Business Administration (SBA) announced that its lender’s PPP Forgiveness Application portal will be opening on August 10th. This means that the Bank is now able to accept completed applications for PPP forgiveness – Form 3508 or 3508EZ. We encourage you to speak to your accountant if you have any specific questions regarding eligible expenses for forgiveness.

On October 8th, the SBA released a new form of application, Form 3508S, for requesting forgiveness of PPP loans of $50,000 or less. This is a welcome change as it simplifies the forgiveness process for many PPP borrowers.

As the borrower, you’re responsible for understanding the program rules and if your loan qualifies for forgiveness. You should also check the SBA’s site and the Treasury’s site frequently as they are regularly updated.

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  • The PPP Flexibility Act (signed into law on June 5th) provides borrowers with additional opportunities to qualify for loan forgiveness. Below is an overview of the changes made to the program:

    • Lengthening the covered period from 8 to 24 weeks so borrowers have more time to use their PPP funds for qualified expenses. Existing PPP borrowers can still elect an 8-week covered period.
    • Extending the loan term to 5 years for all new loans (June 5 or later). Existing PPP loans keep their 2-year term unless Country Bank and the borrower mutually agree to change the term to 5 years.
    • Revising the 75/25 payroll/nonpayroll costs requirement to a 60/40 threshold.
    • Deferring loan payments For borrowers who don’t apply for forgiveness, loan payments are deferred until 10 months after their covered period ends.
    • Expanding the safe harbor related to reduction of employees.

    If you obtained your PPP Loan with Country Bank are ready to submit your forgiveness application and supporting documentation, please utilize the Secure Loan Documentation Portal to upload all of your information. A few things to note on this portal:

    • This is the same portal that borrowers used to upload their original application documentation in order to obtain a PPP loan with Country Bank.
    • Borrowers can upload all forgiveness documentation to the Application folder in the Portal.
    • We will receive an automatic notification when you upload anything to the Portal, so there is no need to contact us separately unless you would like to discuss the process further.
    • If you have any trouble logging back into your Portal account or uploading your application and supporting documentation, please reach out to us at SBATeam1@countrybank.com.

    Per the SBA guidelines:

    • The Bank will have up to 60 days to review and process your complete forgiveness application packet.
    • Once the Bank submits its recommendation for forgiveness (in full or in part) to the SBA, they will have up to 90 days to review the information, ask for clarification/more details, and make their own decision.
    • Even if your loan is not forgiven in full, you will not be required to make any payments on your PPP loan until after this 90 day period has passed.

    We will continue to be in touch with you along the way in order to keep you informed of the process.

  • On June 18, 2020, the Small Business Administration released an “EZ” Paycheck Protection Program loan forgiveness application requiring less documentation and fewer calculations than previously required.

    Form 3508EZ applies to borrowers who meet any one of these three criteria:

    • Applied for the PPP loan as self-employed, an independent contractor or a sole proprietor with no employees.
    • Did not reduce salary or wages for any employee by more than 25%, and did not reduce the number or hours of their employees (excepting laid-off employees who refused an offer to return).
    • Did not reduce salary or wages for any employee by more than 25% during the covered period and experienced reductions in business activity as a result of health directives related to COVID-19.

    This streamlined forgiveness form is expected to smooth the forgiveness application process for a substantial portion of PPP borrowers. SBA has also updated the regular Form 3508 to reflect recent changes made by Congress in the PPP Flexibility Act.

    Borrowers who received a PPP loan of $50,000 or less may be eligible to apply for forgiveness using the simplified Form 3508S which is included below.