Basics of Paycheck Protection Program (PPP) Loan Forgiveness and the Small Business Administration (SBA) PPP Loan Forgiveness Platform — Overview of PPP Loan Forgiveness Process, Ask the Regulators Session (September 3, 2020)
Summary
Slides from an Ask the Regulators session on September 3, 2020, Basics of Paycheck Protection Program (PPP) Loan Forgiveness and the SBA PPP Loan Forgiveness Platform, with speakers Bill Briggs, Ginger Allen and Marty Andrews of the SBA, Cailin Schmeer of the U.S. Treasury and Ben Wallace of The Summit Group. The presentation describes itself as a general, non-comprehensive review and states that official guidance, including the CARES Act, the Paycheck Protection Program Flexibility Act of 2020 and the PPP interim final rules, governs in any conflict. It covers an overview of the forgiveness process, the loan forgiveness platform and how lenders submit decisions, followed by questions and answers. Information is current as of 9/3/20.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
Basics of Paycheck Protection Program(PPP)
Loan Forgiveness and the Small Business
Administration (SBA) PPP Loan Forgiveness
Platform
Speakers:
►Bill Briggs, SBA
►Cailin Schmeer, U.S. Treasury
►Ginger Allen, SBA
►Ben Wallace, The Summit Group
►Marty Andrews, SBA
September 3, 2020
Welcome everyone
• Today’s session
• Questions:
– Email your question to: asktheregulators@stls.frb.org
or
– Use the “Ask Question” button in the webinar tool
• This call is being recorded and will be available following the
session.
– Archived recording can be accessed using the same link as today’s webinar.
• A survey will be delivered via email following the call. Let us know
your thoughts or ideas for future sessions.
2
Overview of
PPP Loan Forgiveness Process
September 3, 2020
Ask the Regulators Session
This presentation is developed to provide a general, non-comprehensive review of PPP loan forgiveness. In the event of any
inconsistency between this presentation and the CARES Act, the Paycheck Protection Program Flexibility Act of 2020, PPP IFRs, FAQs,
Loan Forgiveness Applications and Instructions, and other PPP guidance (together, official guidance), the official guidance governs.
What this Session Will Cover:
1 Overview of PPP Loan Forgiveness
Loan Forgiveness Platform &
2
How To Submit Lender Decisions
3 Q & A with Panel
4
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
PPP Loan Forgiveness Basics
Borrowers are eligible for forgiveness in an amount equal to the sum of the eligible costs and
payments during the 8-week or 24-week Covered Period:
Eligible Costs Additional Considerations
• Payroll costs must account for at least 60% of
Payroll Costs the total PPP forgiveness amount or the
amount of forgiveness will be reduced
Business Rent Payments
• Salary / wage reduction can be no more than
(lease effective prior to February 15, 2020) 25% during the Covered Period or the amount
of forgiveness will be reduced (certain
Mortgage Interest Payments exemptions / safe harbors may apply)
(incurred prior to February 15, 2020) • Borrower must maintain the average number
of full-time equivalent (FTE) employees during
Utility Payments the Covered Period or the amount of
(service in place prior to February 15, 2020)
forgiveness will be reduced (certain
exemptions / safe harbors may apply)
5
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Payroll Cost Considerations
Timing: To be eligible for forgiveness, payroll costs must be:
1. Incurred or paid during the Covered Period or Alternative Payroll
Covered Period.
2. Incurred before the Covered Period or Alternative Payroll Covered
Period, but paid during the Covered Period or Alternative Payroll
Covered Period.
3. Incurred during the Covered Period or Alternative Payroll Covered
Period, but paid on or before the next regular payroll date after the
Covered Period or Alternative Payroll Covered Period.
6
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Loan Forgiveness Process and Timeline
Borrower Lender SBA Review
Application Review & &
Submission Submission Remittance
SBA reviews lender decisions
Lender reviews and submits & makes a determination on
Borrower submits forms and
forgiveness decision to SBA loan forgiveness, subject to
documentation to lender
any SBA review of the loan or
loan application
If borrower does not submit 60 Days 90 Days
Forgiveness Application within
10 months of the end of the
Covered Period, deferral on PPP
loan ends, and borrower must
begin making payments.
7
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Borrower Documentation Requirements
What documentation does the borrower submit to the lender with its forgiveness
application?
In addition to the signed Forgiveness Application Form (SBA Form 3508, 3508EZ, or lender
equivalent) borrowers are generally expected to submit the following (see SBA Form 3508 or
3508EZ instructions for specific details):
1. Payroll: Proof of payment
2. Nonpayroll: Proof of obligation and proof of payment
3. 3508 Only: PPP Schedule A and FTE Documentation
4. 3508EZ Only: FTE Information (if applicable)
For each form, there are certain documents that the borrower is required to maintain, but not
submit. See Instructions to forms.
Additionally, all loans $2 million and over will be subject to SBA loan reviews and additional
documentation will be required.
8
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Borrower Documentation – Payroll
Documents Must Provide Proof of Eligible Costs (e.g., that
payments were made towards eligible payroll costs and within the
eligible Covered Period or Alternative Payroll Covered Period) with the
following:
1. Bank account statements or third-party payroll service provider
reports documenting the amount of cash compensation paid to
employees.
2. Tax forms or equivalent third-party payroll service provider reports.
3. Payment receipts documenting the amount of any employer
contributions to employee health insurance and retirement plans.
See Instructions to forms for other acceptable documents.
9
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Borrower Documentation – Non-Payroll
Documents Must Provide Proof of Eligible Costs (e.g., that
verify existence of eligible non-payroll obligations/services prior to
February 15, 2020 and eligible payment from the Covered Period) with
the following if borrower includes nonpayroll expenses in the amount
requested for forgiveness:
1. Business mortgage interest payments – amortization schedule
and receipts.
2. Business rent or lease payments – lease agreement and receipts.
3. Business utility payments – invoices from February 2020 and
invoices paid during Covered Period and receipts.
See Instructions to forms for other acceptable documents.
10
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Borrower Forgiveness Application Submission FAQ
Question: Who can use the SBA Form 3508EZ forgiveness
application?
Answer: (See Form 3508EZ instructions, page 1)
1) Self-employed individual, independent contractor, or sole proprietor who had no employees
at the time of the PPP loan application and did not include any employee salaries in the
calculation of their average monthly payroll (when determining their eligible loan amount); or
2) Borrower didn’t reduce annual salary or hourly wages of any employee by more than 25%
during Covered Period or Alternative Payroll Covered Period and didn’t reduce the number
of employees or the average paid hours of employees between 1/1/20 and the end of
Covered Period; or
3) Borrower didn’t reduce salary or wages of any employee by more than 25% during Covered
Period or Alternative Payroll Covered Period and was unable to operate during Covered
Period at the same level of business activity as before 2/15/20 due to compliance with HHS,
CDC, or OSHA restrictions issued between 3/1/20 and 12/31/20 related to COVID-19.
11
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Borrower Forgiveness Application Submission FAQ
Question: May a borrower submit a forgiveness application
before the end of their covered period?
Answer: Yes, if the borrower has used all the loan proceeds for which it is
requesting forgiveness.
If borrower reduced annual salary or hourly wages by more than 25%,
borrower must account for the reduction for the full Covered Period (either
8- or 24-week period beginning on the PPP Loan Disbursement Date).
12
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Lender Reviews – Making a Forgiveness Decision
Lenders Have Four Decision Options:
❑ Approved in Full – Lender approved the full forgiveness amount requested by
borrower, and the forgiveness amount requested by lender equals that amount.
❑ Approved in Part – Lender did not approve the full forgiveness amount requested by
borrower and the forgiveness amount decision by lender is less than the forgiveness
amount requested by borrower.
❑ Denied – Lender denied the entire forgiveness amount requested by the borrower.
❑ Denied without Prejudice – Lender should use this status when SBA notifies the
lender that a loan review is pending at the time the borrower submits a loan forgiveness
application.
13
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Overview of Forgiveness Process
Lenders will use the Forgiveness Platform for all aspects of the forgiveness process:
Lender Decision
Account Creation Monitoring
Submission
• Authorizing Officials (AOs) • Lenders submit their • Lenders monitor their
receive a “Welcome to forgiveness decisions via Forgiveness submissions
Forgiveness” email with the Forgiveness Platform. and respond to any SBA
instructions on how to inquiries.
• Lenders upload any
access the Forgiveness supporting documents for • Lenders receive SBA's
Platform and create an their decisions. decision on each
account. submission within 90 days,
• Lenders upload ACH
• Initial AO creates their subject to SBA review of
instructions and
Platform Account. loan or loan application.
Confirmations.
• AOs can select up to 10 • Lenders monitor their
members at their institution payment status.
to receive access to the • AOs view institution’s total
Forgiveness Platform. application portfolio for
reporting.
14
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Forgiveness Platform
• The Forgiveness Platform can be accessed at forgiveness.sba.gov.
• The Platform supports three
methods of submission for
lender forgiveness decisions:
1. Lenders can manually enter
data and upload supporting
documentation.
2. Lenders can connect via API
and submit lender decisions in
bulk.
3. Software Providers can
connect via API and submit
decisions on behalf of lenders.
• Use MS Edge or Google Chrome browsers for an optimal experience.
• Complete information on APIs can be found at https://ussbaforgiveness.github.io/.
15
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Forgiveness Platform – Resources
16
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Forgiveness Platform - Videos
17
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Forgiveness Platform – Payment Settings
18
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Forgiveness Platform – Lender Decision Reminder
19
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Forgiveness Platform – Communication Tools
20
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Forgiveness Platform Submission Process
1. Verify Loan Status 1
• Click “Lookup Disbursed Loans”
• Search for the loan
2. Create New Decision 2
• Four options
• Click “New PPP Decision Submission”
• Select an application form
• Enter loan information
3. Add Supporting Documents
3
• Signed Form 3508/3508EZ or lender equivalent
• PPP Schedule A for Form 3508
• Demographic Information Form (if provided)
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information. 21
Forgiveness Platform Submission Process (cont’d)
4 4
4. Confirm Lender Forgiveness Decision
• Confirm that forgiveness decision criteria has been met
• Designate the decision
• Click “Submit Decision” if the application is complete
5. Monitor Forgiveness 5
• Click “All Forgiveness Submissions”
• Locate loans by filtering for status OR searching for the SBA
Loan Number
• View the application status
22
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Forgiveness Monitoring
23
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
SBA Loan Review Overview
If a loan is selected for an SBA loan review, the lender will be
notified via the Forgiveness Platform. See SBA Procedural Notice
5000-20038 (July 23, 2020), Procedures for Lender Submission of
Paycheck Protection Program Loan Forgiveness Decisions to SBA
and SBA Forgiveness Loan Reviews.
What will SBA
review?
24
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
SBA Forgiveness Payment to Lender
When SBA remits forgiveness payment to
lender, lender must notify borrower of:
• Amount of forgiveness payment received (or that
SBA determined no amount of the loan is eligible for
forgiveness)
• Due date of borrower’s first payment (if applicable)
25
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Economic Injury Disaster Loan (EIDL) FAQ
Question: How will a lender know the amount of the EIDL
advance that will be automatically deducted by SBA?
Answer: If a borrower received an EIDL advance, SBA is required to
reduce the borrower’s loan forgiveness amount by the amount of the
EIDL advance. SBA will deduct the amount of the EIDL advance from the
forgiveness amount remitted by SBA to the lender. The lender will be
able to confirm the amount of the EIDL advance that will be automatically
deducted by SBA from the forgiveness payment by reviewing the
borrower’s EIDL advance information in the Forgiveness Platform.
26
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Remaining Balance FAQ
Question: How should a lender handle any remaining
balance due on a PPP loan after SBA remits the forgiveness
amount to the lender?
Answer: If a PPP loan is not forgiven in full (including if there has been a
reduction in the forgiveness amount for an EIDL advance), any remaining
balance due on the PPP loan must be repaid by the borrower.
• Lenders must notify borrower of the loan forgiveness amount remitted by SBA and the date on
which the borrower’s first loan payment is due.
• The lender must continue to service the loan.
• The borrower must repay the remaining loan balance by the maturity date of the PPP loan
(either two or five years).
If a borrower is determined to have been ineligible for a PPP loan for any reason, SBA
may seek repayment of the outstanding PPP loan balance or pursue other available
remedies.
27
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
General Forgiveness Process FAQs
• How do lenders access the portal? • Is there a maximum number of documents
This platform can be accessed at that can be uploaded with each application?
forgiveness.sba.gov. No, lenders may submit an unlimited number of
documents with each application. The Platform
• How do lenders contact the SBA? supports pdf, xls, xlsx, csv, doc, docx, jpg, jpeg,
The SBA’s PPP Lender Hotline is +1 (833) 572- and png files. The total document limit is 35 MB.
0502.
• Which version of the forgiveness application
• Where can lenders find information about should lenders use (3508EZ or 3508)?
APIs? When entering a forgiveness decision on the
A complete guide for Platform API use can be Forgiveness Platform, lenders should use
found here. whichever version of the form the borrower
provided. Instructions on determining if a
• How many Platform users can each institution borrower is eligible to use the 3508EZ form can
have? be found here.
Authorizing Officials may create up to 10 active
users for each institution. We recommend that no
more than two users be Authorizing Officials.
28
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
General Forgiveness Process FAQs
• How long will it take to receive an SBA • Should the Forgiveness Amount on Line 11 of the
forgiveness decision? 3508 or Line 8 of the 3508EZ include the EIDL
SBA has 90 days to review and remit payment to deduction?
the lender, subject to any SBA loan review. No, SBA automatically will reduce the Forgiveness
Amount by the amount of any EIDL Advance before
• Can documents be added to a forgiveness remitting the payment to the lender. Lenders should
submission after it is submitted? input the EIDL Advance information provided by the
No, submissions must be withdrawn and Borrower on the 3508/3508EZ, where requested in
resubmitted with two exceptions: the Platform, but should not subtract it from the
o If a lender is using APIs, a lender generally Forgiveness Amount.
has 24 hours after submission to add
additional documents to the file. After the • Can a borrower appeal a final SBA loan review
SBA picks up the review, the Platform doesn’t decision?
allow additional documents or file changes. Borrowers may appeal to SBA’s Office of Hearings
o The Platform will allow a lender or API vendor and Appeals (OHA) certain final SBA Loan Review
to add additional documents if the SBA asks decisions. Lenders do not have a right to appeal to
for additional documents as part of its review. OHA. Please see Interim Final Rule on Appeals of
SBA Loan Review Decisions under the Paycheck
Protection Program posted on 8/11/20 at
www.sba.gov/ppp.
29
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
Helping Lenders Be Succesful
Phone: SBA PPP Lender Hotline – +1 (833) 572-0502
Email: SBA Forgiveness Inbox – help@ussbaforgiveness.com
Forgiveness Platform Resources: https://forgiveness.sba.gov
Web: www.SBA.gov/ppp
• FAQs
• Interim Final Rules & Guidance
• Loan Forgiveness Applications (3508 / 3508EZ) and Instructions
30
Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information.
To Ask a Question:
• Email your question to: asktheregulators@stls.frb.org
• Use the “Ask Question” button in the webinar tool
Thanks for joining us.
31
File and source
- File
- PPP_Loan_Forgiveness_Ask_the_Regulator.pdf
- Size
- 1,440,203 bytes
- SHA-256
- e1ad99afa13171c7c7bec7cc18659800d3e033fc3d11f42832217a3598adf5e2
- Original
- www.sba.gov