Paycheck Protection Program – Loan Forgiveness
In June, the PPP Flexibility Act became law. The law simplified the PPP forgiveness rules, including a reduction to 60% in the requirement of how much money must be spent on payroll. Further, borrowers can now elect to use a 24-week covered period to spend PPP loan proceeds. The new law makes it much easier for most borrowers to receive maximum forgiveness.
The SBA has issued two PPP forgiveness applications, form 3508 and 3508 EZ. The EZ form can be used by borrowers that either meet the full staffing requirement or that fall into one of the safe harbor provisions. BankCherokee is doing final testing of an online version of the 3508 applications. When completed, we will ask all borrowers to apply online. If you are anxious to apply, and you are willing to be a test applicant, contact your BankCherokee loan officer.
The PPP Flexibility Act defers loan payments for up to 10 months until the bank receives forgiveness money from the SBA. The deferment extends most borrowers well into 2021. At this time, the SBA has not yet rolled out its web portal to accept PPP forgiveness applications. That means that 3508 forgiveness applications submitted to lenders must be held until the SBA begins accepting them. The SBA expects to have the forgiveness portal up and running near the end of August.
Finally, borrowers should know that congress continues to debate legislation that would further simplify the PPP forgiveness process. This could include blanket forgiveness of loans under $150,000.
We appreciate your patience. We ask borrowers to wait until the SBA issues final forgiveness guidance, and the SBA forgiveness portal is operational. If you have questions or concerns, please contact your BankCherokee loan officer. You can also contact Steve Johnson at 651-291-6246 or firstname.lastname@example.org.
*BankCherokee is no longer accepting PPP applications. Please reach out to your banker for other programs and loan options.