On Friday evening, May 15, 2020, the SBA released the Loan Forgiveness Application and instructionsfor Paycheck Protection Loans. FVCbank will provide an online portal for the electronic submission of the application and documentation required. In the future, you will receive email notifications from applyforppp.com regarding the forgiveness application process. Please whitelist this address to ensure you receive these important notifications.
Some of the key items included in the application are noted below:
The application provides a step by step calculation methodology which will help the borrower identify reductions in the forgiveness amount.
Instructions on the application maintain the 75%/25% thresholds for payroll versus non-payroll expenses in the forgiveness calculation.
Flexibility has been provided for the Covered Period of the loan. It now allows for an eight-week period that begins on the first day of the borrower’s first payroll period following their PPP Loan Disbursement Date (Alternative Payroll Covered Period).
It appears that the SBA will decide whether the borrower should have refinanced an Economic Impact Disaster Loans (EIDL) and determine how that affects the borrower’s forgiveness.
The borrower must, if applicable, affirm and acknowledge that they received a PPP loan with an original principal amount in excess of $2 million.
Borrower certifications, like those in the original application process, are included in the Loan Forgiveness Application, along with a clear warning:
The Borrower’s eligibility for loan forgiveness will be evaluated in accordance with the PPP regulations and guidance issued by SBA through the date of this application. SBA may direct a lender to disapprove the Borrower’s loan forgiveness application if SBA determines that the Borrower was ineligible for the PPP loan.
The borrower must provide information on individual employee payroll expenses, rather than averages.
The application once again affirms that the forgiveness amount will not be affected for instances in which the borrower made a good-faith, written offer to rehire an employee during the Covered Period which was rejected by the employee. It also allows for a reduction in the number of FTEs for any employee who was fired for cause, voluntarily resigned or voluntarily requested a reduction of their hours.
The application provides additional safe harbor for any borrower who reduced FTE employee levels between February 15 and April 26, but who restored those employee levels no later than June 30.
We understand that you may have questions about the application. At this time, the earliest that a borrower can apply for forgiveness is seven weeks from the receipt of the PPP funds. As you review the application and prepare the completion, be aware that our online application process will provide templates to facilitate this process for you. We are here to support you. If you have questions in advance of our planned communications, please email pppq&a@fvcbank.com. In addition, we recommend that you consult with your accountant if you have questions about the information as it pertains to your company.
As always, we will keep you apprised of any changes that occur throughout this process. We look forward to working with you to complete the loan forgiveness process and to see how we can assist you with your banking needs now and in the future.
