Welcome to PPP Forgiveness Update #8. Thanks for reading and thanks to those of you that tuned in to Wednesday’s Loan Forgiveness Webinar. We will be presenting another webinar next Thursday, July 9 at 3:00 p.m.  Information to access the webinar will be forwarded in the near future. As discussed in the webinar, there have been numerous changes to the loan forgiveness rules. The majority of these changes have simplified the process so it is not nearly as onerous as the initial application and rollout made it seem. This is especially true if a borrower is able to cover 100% of the loan amount through payroll costs, which we are encouraging all of our borrowers to try to do.

There are two things that I wanted to highlight in today’s update. First, the SBA eTran Portal is still not taking applications for loan forgiveness. This means that, even if you submit your application to the bank and we approve for submission to the SBA, the application cannot be forwarded to the SBA until the portal opens. This means the 90 day window for SBA approval does not start until the portal opens.

Second, another bill, authored by Senator Rubio and a few others, seems to be getting some consideration in the Senate. This could drastically alter the process for forgiveness and we recommend that borrowers consider waiting before applying when possible. Highlights of the bill are as follows:

1. Changes to Current Program Rules
   1. PPP Loan Forgiveness changes:
      1. For loans under $150,000: Borrowers are not required to submit to the lender documentation required by section 1106(e) of the CARES Act, but must attest to a good faith effort to comply with the PPP loan requirements, and retain relevant records for one year. The Administrator may audit a small portion of these loans to ensure against fraud.
      2. For loans between $150,000 and $2 million: Borrowers are not required to submit to the lender documentation required by section 1106(e) of the CARES Act, but must complete the certification required by that section, retain relevant records and worksheets for two years, and may complete and submit demographic information. After lenders review the application for completeness, they shall submit the application to the Administrator. The Administrator shall audit a small portion of these loans to ensure against fraud.

1. Add eligibility of 501(c)(6) organizations as long as funds are not used for lobbying and they have fewer than 50 employees.

1. Increase allowable expenses to include
   1. “Covered supplier costs” are expenditures to a supplier pursuant to a contract for goods that are essential to the PPP recipient’s operations.
   2. “Covered worker protection expenditure” includes adaptive investments to help a loan recipient comply with federal health and safety guidelines related to COVID-19 during the period between March 1, 2020, and December 31, 2020.

A summary of the bill is linked here, for your review. I don’t know when or if this bill might be passed but, I will keep you posted as we hear updates. Please remember, borrowers have up to 10 months after the 24 week forgiveness period to submit the application for loan forgiveness. If it looks like this bill may pass, it may be worth waiting for it in order to reduce borrower paperwork. If you prefer to move forward with the application now, we are processing applications through our website and will be ready to submit these to the SBA when they begin accepting them.

All in all, it looks like the loan forgiveness process will be much less cumbersome than when originally presented. We are looking forward to assisting each of you to ensure maximum loan forgiveness for all.

Once again, I thank all of you for choosing CFB for your PPP loans. We have been fortunate to be able to serve over 600 businesses, many of whom are working with us for the first time. We hope your experience has been a satisfactory one. We have been humbled by the outpouring of thanks from many of you. During the busiest times of the PPP process, those thanks served as great encouragement to our staff, many of whom were working long hours to make sure we were able to assist as many as possible. The kind comments were greatly appreciated.

Best wishes for a safe, healthy and happy Fourth of July weekend!