PPP Loan Forgiveness Update
You may apply for forgiveness as soon as you have used all of your PPP funds for acceptable purposes or you are past the loan forgiveness covered period as defined in the PPP Interim Final Rule. The loan forgiveness covered period ends the earlier of 24 weeks after the date of the disbursement of your loan or December 31, 2020, except if the loan was made before June 5, 2020 you may opt to use the original 8-week covered period.
Your loan payments will continue to be deferred until the earlier of: (a) the date that SBA remits your loan forgiveness decision to the lender, or (b) if you do not apply for forgiveness, 10 months after the end of your loan forgiveness covered period.
Please note: If you received your PPP loan prior to June 5, 2020, both the loan forgiveness covered period and the payment deferral period changed as a result of the Paycheck Protection Program Flexibility Act of 2020 (PPPFA).
Prior to submitting the forgiveness application to the bank, here are some items to consider and discuss with your accountant or professional advisor:
Documentation: Be sure you have gathered all the appropriate documentation required to submit your application and qualify for the maximum amount of forgiveness. Submitting an incomplete application will delay processing.
The following steps will ensure that your application is complete and processed promptly:
- Access your forgiveness application via your secured link provided by the bank.
- Review criteria questions to determine which application to use: SBA form 3508, 3508 EZ, or 3508 S.
- Complete the appropriate application and submit it to the bank.
- Provide the recommended supporting documentation.
- Understand that any Economic Injury Disaster Loan (EIDL) advance you received will be deducted from the amount the SBA will remit to the lender, which may result in a remaining PPP loan balance after forgiveness.
Timing: Applying for forgiveness is a process, with several steps:
- Completion and submission of your completed application package to the bank.
- SaviBank Review: The Bank has 60 days to review your application and documentation for completeness under SBA guidelines, but is able to move well-supported applications through this process more rapidly.
- Submission to the SBA for review and approval: Once the bank has reviewed your application and has submitted it to the SBA, the SBA has up to 90 days to review the application and the supporting documentation and to remit the forgiveness amount to the lender. With current applications, we have experienced delays, and we anticipate that delays will continue as the volumes of applications increase.
We will continue to provide updates on the forgiveness process as we received them from the SBA. To ensure that the bank is able to provide our PPP borrowers with excellent service, and that we are able to submit all applications to the SBA within the 60-days allotted to us, we will be contacting borrowers on a scheduled basis over the next several months. If you are anxious to get started on your application, please contact your loan officer for guidance on what steps you can take now to prepare for a successful PPP forgiveness application. We are looking forward to working with you to achieve the maximum amount of forgiveness for which you qualify.
If you have additional questions regarding PPP loan forgiveness after reviewing the materials provided by the SBA, please contact your local SaviBank Lender or the PPP Task Force at 360.755.6599 or firstname.lastname@example.org.
This information does not, and is not intended to, constitute legal advice; instead, all information, content and materials are for general informational purposes only. You should contact your attorney to obtain advice with respect to any particular legal matter. The content is current as of November 2, 2020 and subject to change.
For further guidance, visit the SBA PPP Loan Q&A page.