SBA “Paycheck Protection Program”

Congress has passed and the President has signed the PPP Flexibility Bill changing some of the terms of the PPP loan program. The SBA has issued new interim final rules.

  • There are now two applications to choose from: 3508EZ (short form) or 3508 (long form). The Applicant should view the Checklist on the first page of the 3508EZ Instructions to see if they qualify to file the short form.
  • The Applicant may elect an 8-week or 24-week covered period1.
  • Eligible non-payroll costs cannot exceed 40% of the total forgiveness amount.
  • Forgiveness applications must be completed and submitted by the Borrower within 10 months after the end of their elected covered period.
  • The same individual that completed the original PPP application will receive the ELECTRONIC forgiveness application.
  • It remains the responsibility of the borrower to provide an accurate calculation of the loan forgiveness amount.

First Payment Date

Per the PPP Loan Forgiveness FAQs, if the borrower submits its loan forgiveness application within ten months of the completion of the Covered Period, the borrower is not required to make any payments until the forgiveness amount is remitted to the lender by the SBA.  If the loan is fully forgiven, the borrower is not responsible for any payments. If only a portion of the loan is forgiven, or if the forgiveness application is denied, any remaining balance due on the loan must be repaid by the borrower on or before the maturity date of the loan.  The lender is responsible for notifying the borrower of remittance by SBA of the loan forgiveness amount (or that SBA determined that no amount of the loan is eligible for forgiveness) and the date on which the borrower’s first payment is due, if applicable.

Applying for Loan Forgiveness

1A borrower may submit a loan forgiveness application any time on or before the maturity date of the loan—including before the end of the covered period—if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness. If the borrower applies for forgiveness before the end of the covered period and has reduced any employee’s salaries or wages in excess of 25 percent, the borrower must account for the excess salary reduction for the full 8-week or 24-week covered period. If the borrower does not apply for loan forgiveness within 10 months after the last day of the covered period, or if SBA determines that the loan is not eligible for forgiveness (in whole or in part), the PPP loan is no longer deferred and the borrower must begin paying principal and interest.  Source: Interim Final Rules.

Forgiveness Update

SBA’s PPP Forgiveness platform went live accepting applications on Monday, August 10, 2020. We are currently testing this new platform, before accepting mass Forgiveness applications. There appears to be continued strong bi-partisan support in Congress for a streamlined PPP loan forgiveness process for PPP loans of $150,000 and under.

We remain hopeful there could be a loan forgiveness provision inserted in the next relief package being debated in Congress. It is anticipated that negotiations between the White House and Congress on the next relief act or stand-alone bill may not begin until mid-September, which likely means nothing passes before October 1st. In the interim, RCB Bank will not be accepting Forgiveness applications $150,000 and under. We will reevaluate and post our next steps on Wednesday, September 30 , 2020, if not sooner to our website.  We appreciate your continued patience, as we eagerly wait for additional Congressional relief and guidance from the SBA.

Submission Instructions

An RCB Bank representative will contact you to discuss whether you are ready to complete the electronic application and provide all of your support documentation. RCB Bank will be emailing you a secured electronic version of SBA’s Forgiveness application via DocuSign, which you will need to complete in full and attach all of your forgiveness support documentation when replying to the email. RCB Bank will be performing a good-faith review of each Applicant’s completed Forgiveness application before submitting to the SBA for their final determination. Please refer to the SBA’s Forgiveness Timeline provided above and take notice that this may be a lengthy process. You will receive an email notification after each application completion milestone.

Meanwhile, you are encouraged to review and get familiar with the SBA’s Interim Final Rules as well as the PPP Loan Forgiveness Applications and Application Instructions. Please note that the SBA’s issued Forgiveness information is still subject to change. RCB Bank will be posting updates of any material changes to our website as the SBA releases new information.

Other PPP Resources

RCB Bank will continue to monitor the changes and provide updates on this website as they are provided to us.

(Updated August 27, 2020 3:15 p.m.)