As many of you may have already heard, the Senate has passed a bill amending PPP forgiveness guidance that will likely benefit all of our PPP borrowers. While the bill is still awaiting the President’s signature, we believe it is unchanged from the version passed by the House. The most significant changes are as follows:

1. Extends the covered forgiveness period from 8 weeks to 24 weeks or until December 31, 2020, whichever is earlier

2. Requires at least 60% of the loan to be used for payroll costs to be considered for forgiveness

3. Increases the maximum allowable “other expenses” from 25% of forgiveness to 40%

4. Extends deferral period until forgiveness amount is determined

5. Requires the borrower to apply for forgiveness before 10 months after the last day of the covered period

6. Extends the maturity period for unforgiven amounts to five years (requires mutual agreement of bank and borrower on loans already closed).

It is our hope and belief that, with these changes, nearly all of the PPP loans made by CFB will be fully forgiven. We are still awaiting word on possible changes that would simplify the forgiveness process for loans at a de minimus level. The most recent updates I have read have set that level at $350,000. Loans below that amount would simply require submission of a borrower attestation, along with certain supporting documents. This change has not been passed but, neither has it been dismissed. As in earlier updates, I would encourage you to contact your government representatives to ask for their support of this change.

Because of the possibility of additional changes, we are still encouraging each of you to continue to gather documentation (payroll information, receipts, leases, etc…) evidencing payroll and other qualifying expenses, while continuing to wait to submit a forgiveness application. We are moving forward in developing our process for processing forgiveness applications, with a goal of finalizing and releasing our process by June 15. We will continue to issue updates, as new information becomes available. 

We thank you for your continued patience through this evolving process. We appreciate the opportunity to be of service. Please feel free to contact us if you have questions prior to the next update.

 

Sincerely,

Robb Blume

CEO & President

Community First Bank of Indiana