Paycheck Protection Program loans may be forgiven in full depending on use of funds and eligibility. The loan may be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities during the covered period following the funding of the loan. Please note at least 60% of the forgiven amount must have been used for payroll. Here, we have put together a list of resources to help Liberty’s PPP borrowers get organized around loan forgiveness.
Loan Forgiveness Update
We are finalizing our forgiveness portal! We will be inviting borrowers to the portal site in batches. You will know that we are ready for you to submit your forgiveness information once you receive an email with a link to the portal.
On October 12, 2020, the SBA released Loan Forgiveness Application (SBA Form 3508S), a simpler application for Paycheck Protection Program (PPP) loans of $50,000 or less. We encourage you to review this form and the specific guidelines outlined by SBA. This action supports SBA’s continued effort for additional legislation to simplify the forgiveness process.
We are working hard to incorporate these updated guidelines and will have an easy-to-use online forgiveness application available in the coming weeks. We will continue to keep you updated and will provide all instructions to access the portal and the documentation requirements when we are ready to go!
On June 17, 2020, SBA released a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application implementing the PPP Flexibility Act of 2020. In addition to revising the full forgiveness application, SBA also published a new EZ version of the application, Loan Forgiveness Application (SBA Form 3508EZ), that applies to borrowers who:
- Are self-employed and have no employees; OR
- Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; OR
- Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.
The EZ application requires fewer calculations and less documentation for eligible borrowers. We encourage you to review this form and the specific guidelines outlined by SBA.
Loan Forgiveness Process
Liberty is working hard to finalize the borrower forgiveness portal. All instructions to access the portal and the documentation requirements will be sent to you via email when we are ready to go. We are optimistic that the forgiveness process will be made even easier for borrowers. We appreciate and encourage you to be patient as you are not penalized for waiting to apply for forgiveness! Under the legislation borrowers have 10 months from the end of their covered period to apply.
We are closely monitoring any changes to the PPP rules and pending proposed legislation as these developments may change how the loan forgiveness process works. We will continue to keep you informed and will guide you through this process to ensure your forgiveness is processed as efficiently as possible.
Please note that once the portal is open and all required documentation has been received, the file must undergo a review of the documentation as well as the loan documents. Your package will then be sent to the lender, Celtic Bank, for submission to the SBA. The lender has 60 days from receipt of a complete loan forgiveness application to issue a decision to the SBA, and the SBA, subject to its review, will remit funds within 90 days after the lender issues its decision to the SBA. The lender will notify the borrower of the loan forgiveness amount.
SBA and the U.S. Treasury Department have published a variety of resources for borrowers related to PPP forgiveness. We’ve aggregated these resources for you here:
- CARES Act
- PPP Flexibility Act
- Interim Final Rules:
- General Program Guidance
- Affiliation Rules
- Additional Eligibility Criteria and Requirements for Certain Pledges of Loans for the Paycheck Protection Program
- Promissory Notes, Authorizations, Affiliation, and Eligibility
- Seasonal Employers
- Requirements – Corporate Groups and Non-Bank and Non-Insured Depository Institution Lenders
- Nondiscrimination and Additional Eligibility Criteria
- Extension of Limited Safe Harbor with Respect to Certification Concerning Need for PPP Loan Request
- Requirements for Loan Increases for Partnerships or Seasonal Employers
- Eligibility of Certain Electric Cooperatives
- Treatment of Entities with Foreign Affiliates
- Second Extension of Limited Safe Harbor
- Requirements – Loan Forgiveness
- SBA Loan Review Procedures and Related Borrower and Lender Responsibilities
- Eligibility of Certain Telephone Cooperatives
- Interim Final Rule on Revisions to the First PPP Interim Final Rule
- Additional Revisions to First PPP Interim Final Rule
- Interim Final Rule on Revisions to the Third and Sixth Interim Final Rules
- Revisions to Loan Forgiveness Interim Final Rule and SBA Loan Review
- Additional Eligibility Revisions to First PPP Interim Final Rule
- How to Calculate Loan Amounts
- Certain Eligible Payroll Costs (Fishing Boat Owners)
- Appeals of SBA Loan Review Decisions Under the PPP
- Treatment of Owners and Forgiveness of Certain Nonpayroll Costs
- Additional Revisions to Loan Forgiveness and Loan Review Procedures
- U.S. Chamber of Commerce Summary
- Loan Forgiveness Application (Full) with Instructions
- Loan Forgiveness Application (EZ) with Instructions
- Loan Forgiveness Application (S) with Instructions
- Forgiveness documentation (TBD)
- Loan Forgiveness Rules