A number of questions have come up related to nuances in the forgiveness process of the PPP program. Here are a few of them:
How will the SBA treat the EIDL Advance (Up to $10,000) that I took when they review my PPP forgiveness application?
It has become clear this week in banking trade journals and in certain media outlets that the SBA has been reducing a borrower’s loan forgiveness by the amount of their EIDL Advance. There were conflicting communications on this matter through the PPP loan process, but most borrowers and banks have been surprised by this development.
There is some talk of a legislative fix to this problem. It is not clear when this fix may come or what form it may take, but Citizens Bank now recommends that if you took an EIDL loan and received an advance of any size, that you wait to file your PPP forgiveness application until there is clarity on this issue. If you believe you simply can’t wait, we will process your application but you run the risk of having the amount of your EIDL advance convert to a non-forgiven loan balance.
What do I do if I am considering selling my business prior to obtaining PPP forgiveness?
Consult an attorney immediately. There are very specific requirements imposed by the SBA if a PPP borrower is sold, which may include the requirement to obtain SBA approval prior to the sale, and that you establish a deposit with the PPP lender equal to your PPP loan amount. Click here to read a copy of an SBA Procedural Notice published 10-2-20 that covers this issue.
Citizens Bank recommends that you apply for and receive PPP forgiveness prior to selling your business, but please be aware that we are unable to advise you on any potential liability you may have to the SBA, The Treasury Department or any other entity in this situation. Your first call should be to your attorney.
What do I do if I am considering closing my business before I obtain PPP forgiveness?
Consult an attorney immediately. The SBA has not made it clear what will happen to businesses and business owners if they close their businesses prior to having their PPP loan forgiven or otherwise paid in full. Most indications are that you will remain liable for full repayment until your loan is forgiven.
Citizens Bank recommends that you apply for and receive PPP forgiveness prior to closing your business, but please be aware that we are unable to advise you on any potential liability you may have to the SBA, The Treasury Department or any other entity in this situation. Your first call should be to your attorney.
How can I send my PPP Forgiveness Application to Citizens Bank in a secure manner?
Please click this link and select the lender to whom you want to direct your forgiveness package. The documents will then be transferred in an encrypted form for your protection.
As always, we stand ready to answer your questions about the PPP using the best available information.
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.