On Friday July 24, the SBA issued a notice announcing that they will begin accepting PPP loan forgiveness applications on August 10, 2020. Lenders will be able to submit forgiveness requests to the SBA using a newly created secure software platform. The notice outlines the process in part but indicates that detailed instructions regarding the use of the platform will be made available when the system itself goes live – meaning not until at least August 10th.
This leaves us with many unanswered questions. Additionally, the notice states the SBA will issue another interim final rule, so we know there is more guidance to follow.
One of the many questions remaining is what supporting information will Borrowers need to submit as part of their forgiveness application? We have attached a list of anticipated documents, though the list is likely incomplete as we expect the SBA / Treasury will issue additional guidance on the process. See link below.
As a reminder, a Borrower may use the Forgiveness Application Form 3508EZ if you meet at least one of the three following safe harbors:
- You are self-employed and do not have any employees; or
- You did not reduce annual salary or hourly wages of any employee by more than 25%, and you did not reduce the number of employees or the average paid hours between January 1, 2020 and the end of your covered period; or
- You did not reduce annual salary or hourly wages of any employee by more than 25%, and you were unable to operate at the same level of business during the covered period due to public health directives
It is also worth noting that Congress is negotiating another round of emergency aid that may streamline the forgiveness process significantly for loans of $350,000 or less.
Citizens Bank has determined not to begin accepting forgiveness applications at this time. We will wait until August 10th or perhaps later to begin that process to ensure the SBA site is up and running and that we understand the forgiveness requirements and any legislative developments. While we understand the urgency on the part of our Borrowers, we believe it will be to your benefit to wait until we have a better understanding of what the SBA is going to require for maximum forgiveness.
Citizens Bank recommends that you consult your outside advisors and experts in all matters relating to the PPP and loan forgiveness. We will work to provide you timely and accurate information, but the burden for obtaining forgiveness rests on the borrower. All information provided in this format or any other communication regarding the program is believed to be accurate, but no guarantee is or can be made by any Citizens Bank representative.
Please submit your questions to pppquestions@citizens-banking.com. Include the name of your business in your e-mail. We will endeavor to answer in a timely way with the best information currently available.