• Sound business practices should outweigh maximizing the amount of the PPP loan forgiven.  Prudent business planning should be used when evaluating the number of FTE’s that will be returning to work and when and what other eligible expenses will be paid during the covered period.
• No more than 25% of the amount of the PPP loan forgiven can be for non-payroll purposes (rent, interest, and utilities).
• Gross annualized wages in excess of $100,000 per employee will not be forgiven.  Therefore, the maximum (8 weeks) amount of wages forgiven for any one employee is $15,385 ($100,000 x 8/52).
• Payments for group health benefits and employer contributions to retirement plans are not subject to the $100,000 cap.
• A reduction in the number of Full Time Equivalent (FTE) employees will reduce the amount of the PPP loan that is eligible for forgiveness.
• Employees who have had their salaries substantially reduced during the eight-week covered period (a reduction in excess of 25% compared to the most recent quarter before the covered period) will reduce the amount of the loan that may be forgiven (pending final SBA guidance).
• The forgiveness reductions related to reduced FTE’s or substantially reduced salaries may be disregarded if you return to full employment by June 30^th (pending final SBA guidance). 

Dear PPP Customer,

The extension of the PPP loan program formally ‘sunsetted’ as of end of day August 8^th which means the SBA is no longer authorizing new PPP loans. And so, at this time we are no longer accepting new PPP loan applications.

Congress is negotiating a new round of coronavirus relief. Included in this package is a proposed extension of the PPP loan program. However, at this time we do not know that to be fact, nor do we know if it were to be approved what it will look like, nor the timing.

As to forgiveness…. we continue to anticipate the approval of a much-simplified process for requesting forgiveness for recipients of loans less than $150,000. There is some talk that this threshold might even be a bit higher. So, we ask that you continue to refrain from applying for forgiveness. However, for recipients of larger loans of $350,000 or greater, we can begin accepting applications beginning Monday, August 17^th.

Reminder, all archived emails and up to date information can be found on our website.

Your People’s Bank Team

Dear PPP Customer,

On Monday, Senators Marco Rubio and Susan Collins introduced the “Continuing Small Business Recovery and Paycheck Protection Act,” a federal relief package that builds on the CARES Act. A one-page rundown of the proposal can be found here (click here to review document).  The act introduces additional avenues of help for small business and proposes changes to the PPP loan program. If approved, the vast majority of PPP recipients could benefit.

Recently, SBA lenders received long awaited guidance on the PPP Forgiveness process.  The SBA’s online “PPP Forgiveness Platform” is tentatively scheduled to be available to lenders in mid-August.  Once this platform is up and running and lenders are authorized, they can begin submitting borrower Forgiveness Applications electronically. Stay tuned for more information on this in the coming days.

Reminder, all archived emails and up to date information can be found on our website.

Your People’s Bank Team

Dear PPP Customer,

Similar to when an airline pilot maintains a holding pattern while awaiting permission to land… so too are we in a PPP holding pattern! What factors are keeping us from accepting your Loan Forgiveness applications? 

1. Anticipated legislation that could significantly change the current forgiveness process.
2. Expected revisions to Forgiveness application forms.
3. Delayed roll out of SBA software platform needed for lenders to submit for forgiveness on your behalf. SBA Administrator Jovita Carranza recently announced the SBA hopes to have a forgiveness portal – through which banks can apply for forgiveness on behalf of borrowers – up and running by August. 

Please know, your People’s Bank team remains vigilant in all things PPP.  We actively advocate for all of our small business community.  We educate ourselves daily and keep abreast of current SBA events.  Don’t forget to visit our website for archived emails and up to date information. 

 Also, consider visiting the Oregon Small Business Development Center (SBDC) Network online.  They have several relevant on demand and upcoming small business educational webinars available for free or at a nominal fee.  Coming up in August, “Bouncing Back and Making Your Business Pandemic Proof.”  Click here for a list of events: SBDC Events and Workshops.

Your People’s Bank Team

Dear PPP Customer,

On June 30^th, a bipartisan bill “The PPP Small Business Forgiveness Act” was introduced to the Senate. This proposed legislation would drastically streamline the current and complex forgiveness process for approximately 86% of all loans made through the SBA PPP program.  It would allow loans of $150,000 or less to be forgiven simply by borrower completing and submitting to lender a one-page forgiveness attestation.  

This legislation, if passed, could reduce the time and paperwork burden for you and so many more in our business community. People’s Bank is advocating on your behalf, but please consider taking immediate action by contacting your lawmakers today!  Follow this link to assure your voice is heard. (https://secureamericanopportunity.com/take-action/urge-the-senate-to-pass-legislation-to-forgive-ppp-loans-under-150k/)

Two quick reminders; 1) we are not yet accepting PPP forgiveness applications in anticipation of further changes, and 2) People’s Bank is still accepting new PPP applications through July 31st.  If you are aware of any business in your sphere of influence needing assistance refer them to our website.

Your People’s Bank Team

Dear PPP Customer,

The CARES act Paycheck Protection Program was extended to August 8^th, 2020.  There remains over $131 billion available to help impacted small businesses. 

The US Treasury Department and Small Business Administration continue to focus on getting loans to every business needing assistance.  This focus combined with potentially significant legislative changes to the program regarding forgiveness still has us in a holding pattern.  

People’s Bank also has concern for our local businesses who have not yet applied.  We have reopened our application portal and are accepting new PPP applications through July 31st.  If you know of any small business struggling due to the COVID-19 events and who would benefit from a PPP loan, please refer them to our website.

Your People’s Bank Team

We had hoped by now to have more information to share with you about the SBA PPP forgiveness application process. Unfortunately, no new guidance has been released informing Lenders on “how” to submit for forgiveness on your behalf. So,….

….we must continue to ask you to not yet submit your application for forgiveness.

While we recognize and fully empathize with your desire to get your loan forgiveness ‘behind you,’ we want to remind you of a few points that should significantly reduce any concerns you may have: 

• If you spent your PPP loan proceeds on qualified purposes, with at least 60% having been for payroll, and you can properly document it, your loan will be forgiven (if less than 60% was spent on payroll, then a portion of your loan will be forgiven); 

• Recent guidance indicates the loan payment deferral period was increased from 6 months to 16 months; and 

• There is no ‘early deadline’ for forgiveness. Forgiveness can be requested up to the maturity date of your note. So, you have plenty of time.

As promised, we will continue to send updates as information becomes available.

SBA Streamlines PPP Forgiveness Application for Many PPP Borrowers

Today, the Small Business Administration released a three-page “EZ” Paycheck Protection Program loan forgiveness application requiring less documentation and fewer calculations than previously required. Form 3508EZ (click here) and the EZ instructions (click here) apply to borrowers who meet ANY ONE of these three criteria:

• Applied for the PPP loan as self-employed, an independent contractor or a sole proprietor with no employees.
• Did not reduce salary or wages for any employee by more than 25%, and did not reduce the number or hours of their employees (excepting laid-off employees who refused an offer to return).
• Did not reduce salary or wages for any employee by more than 25% during the covered period and experienced reductions in business activity as a result of health directives related to COVID-19.

In addition, they made a slight revision to the standard Forgiveness Application form (click here) and provided separate instructions (click here).

We recognize the 8-week window for early recipients approaches, but we continue to hold out hope SBA will further streamline the process so we encourage that you continue to hold off on applying for forgiveness. We believe if the further streamlining is to occur, we’ll know within the coming week.

We understand all of you want to get past this hurdle of loan forgiveness as soon as possible. The waiting is both difficult and frustrating. However, asking you to hold off is truly in your best interest. Further program enhancements will make the forgiveness process much easier for all!

Your People's Bank Team

Dear PPP Loan Customer,

Last night the Small Business Administration and Treasury Department released revised guidance to reflect those changes that came into effect as a result of the Paycheck Protection Program Flexibility Act. PPP IFR Revisions to First Interim Final Rule.

This updated guidance codifies several changes to the PPP program. Specifically, it:

•  Reminds us the last day we can obtain an SBA loan number for a PPP loan is June 30, 2020.
• Confirms that borrowers using less than 60% of their PPP loan amount for payroll costs during the forgiveness covered period will still be eligible for partial loan forgiveness.
• Provides a five-year maturity for loans made on or after June 5, 2020 and provides an option for loans made prior to that date to extend maturity from two years to five years at the mutual agreement of the borrower and lender.
• Extends the loan forgiveness period from eight weeks to 24 weeks.

SBA signaled that it will issue additional guidance on loan forgiveness and loan review procedures. They did not indicate when that would be coming but we commit to letting you know just as soon as we get information. 

These are very positive changes. Having more flexible program requirements will make it easier for you to maximize your loan forgiveness. Please continue to watch for additional email communication as we learn more. 

Your People’s Bank Team

Dear PPP Loan Customer,

Today, President Trump signed the “Paycheck Protection Program Flexibility Act” into law. 

What does this mean for you?

People’s Bank is one step closer to being able to introduce our Forgiveness Application process.  More importantly, the passage of this Act means more flexibility for you, our borrowers.  The ease in requirements are designed to make it simpler for you to reach full or almost full forgiveness.

• The minimum amount a business must devote to maintaining payroll is reduced from 75% to 60%;
• The 8-week covered payroll period is now extended up to 24 weeks;
• Borrowers will have until December 31, 2020 to restore workforce levels and wages to pre-pandemic levels; 
• The repayment of any unforgiven amount can now be extended up to a term of 4 ½ years if mutually agreed upon by borrower and lender; and
• Payroll tax deferment

Now that the bill has been signed into law, SBA and the US Treasury will publish the new Forgiveness Application form and guidance. In the meantime, our People’s Bank Team will be developing tools to assist in the completion of the Forgiveness Application.    

Please keep watching our website for updates.