PPP (Paycheck Protection Program) Loan Forgiveness Information
August 6, 2020, UPDATE: PPP Loan Forgiveness Applications are available now and can be submitted once you’ve met the forgiveness requirements. Banks can begin filing the requests with the SBA starting August 10, 2020, but that doesn’t mean there is a rush for businesses to get them in by that date. Unlike the original process to get the loan, which had an urgency to apply before funds ran out, the SBA is NOT in danger of running out of “forgiveness” funds. You have up to 10 months from the end of your covered period to submit your forgiveness application to meet the SBA’s deadline. The bank has 60 days to review your forgiveness application and submit to the SBA, and the SBA has 90 days to review the request. While we understand you may be anxious to get the process started, we encourage you to review the application forms and instructions, and submit your application for forgiveness when you’re sure you’ve met the requirements.
These FAQ’s were released by the SBA on Aug. 4, 2020. The document includes sections addressing general questions on loan forgiveness, questions related to forgiveness of payroll and nonpayroll costs and questions on forgiveness reductions.
Forgiveness Application: EZ Form
To use the EZ form the business needs to meet the following requirements:
- Self-employed and have no employees; OR
- Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; OR
- Experienced reductions in business activity as a result of health directives from the CDC, OSHA, HHS, State, or local agencies related to COVID-19 (ie: required to close as a non-essential business), AND did not reduce the salaries or wages of their employees by more than 25%.
Forgiveness Application: Standard Form
If your business does not meet the criteria listed above you will likely need to fill out the standard form below.
How To Submit Your PPP Loan Forgiveness Application
Prior PPP Loan Forgiveness Updates
June 26, 2020, UPDATE: The SBA released updated PPP Loan forgiveness applications (listed above) on June 16. Those applications and instructions for filling them out are posted here. There are two applications from which to choose; the 3508EZ form and the standard 3508 form. While we are still waiting for the SBA to provide guidance on some details we’ve outlined the main points to know when choosing the correct form.
While we have provided these revised applications, we are still waiting for updated guidance from the SBA about the forgiveness approval process and the submission process to the SBA for such requests. We will continue to pursue more information and relay it as it becomes available. Because things are still fluid it may be worthwhile to wait on submitting your application.
June 8, 2020, UPDATE: The requirements for PPP Loan forgiveness were changed by the government on Friday, June 5th. The Journal of Accountancy website has a really good overview of the changes which can be seen here: https://www.journalofaccountancy.com/news/2020/jun/ppp-loan-forgiveness-changes-coming.html
We have developed several options for both personal and business clients who have been economically affected by the coronavirus outbreak. Some of these options include special loan arrangements, waiving fees, skip-a-pay arrangements, and extending credit lines. But, we’ll customize the solution to your situation. If you are experiencing financial challenges due to this situation, please reach out to your lender or personal banker. You can also text or call our Customer Care Department 7-days a week to learn more at 573-642-3322 or go here to send them a message.
Our Commitment To You
We take our position as a community bank seriously, and that means helping our clients and neighbors through challenges like this. Over our 163 years as a mid-Missouri bank, we have experienced many tough times. We’re here for challenges and moments like this.
SBA COVID-19 Resources for Businesses
Applying for a PPP Loan
The second round funding for the SBA Paycheck Protection Program began Monday, April 27 and applications were originally accepted through June 30, 2020. However, Congress has extended the date to apply to August 8, 2020.
All of our customers will be treated equally and fairly. While our current clients will be given priority, we will do our best to process new client applications as quickly as we can. The loan package below has been updated with information for self-employed businesses.
The Callaway Bank has prepared an SBA loan package and calculator tool (below) for the Paycheck Protection Program.
- SBA COVID-19 Loan Package v6 (Includes Self Employment Information)
- Paycheck Protection Program (PPP) Information Sheet for Borrowers (from Treasury.gov 3-31-20)
- Program Rules: Frequently Asked Questions (from Treasury.gov 4-26-20)
- More from Treasury.gov on Small Business Assistance
To contact an SBA Lending Specialist, please use this form.
What is the difference between the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL)?
This table (click here) outlines both programs. (Please note it is already included in the loan package link above.)
Additional COVID-19 Relief for Businesses:
Employer Payroll Taxes. Employers and self-employed individuals may delay the payment of the employer portion of payroll taxes due between March 27 and December 31, 2020. 50% of any payroll taxes deferred under this provision must be paid by December 31, 2021, with the remaining 50% paid by December 31, 2022.
Employee Retention Credit. Employers whose operations were fully or partially suspended due to a coronavirus- related shut-down order or whose gross receipts declined by more than 50% (compared to the same quarter in the prior year) have a new tax benefit if they continue to pay employees. The above employers will receive a refundable quarterly payroll tax credit equal to 50% of qualified wages paid to an employee from March 13 through December 31, 2020. For purposes of the credit, up to $10,000 of qualified wages paid per employee during this period is taken into account. Excess credits are refundable.
Retirement Plan Funding & Documentation. The deadline for employers to make contributions to certain workplace-based retirement plans has been extended. In addition, employers sponsoring retirement plans may immediately adopt provisions allowing coronavirus related distributions and plan loans based on the CARES Act but formally amend the plan at a later date.
Net operating losses (NOLs). Generally, a NOL means deductions (for expenses from operating a business) are greater than the income generated from operating a business. A NOL incurred in one tax year generally may be used to reduce taxable income in a future tax year. The Tax Cuts and Jobs Act of 2017 significantly pared back the ability of businesses to carry forward/carry back NOLs, but the CARES Act substantially liberalizes the NOL rules – please consult a tax professional to learn more.
Business Interest Deduction. The CARES Act temporarily increases the amount of interest expense businesses are allowed to deduct on their tax returns, by increasing the 30- percent limitation to 50 percent of taxable income (with adjustments) for 2019 and 2020.
Small Business Administration (SBA) loans. To assist small businesses, the CARES Act greatly expands the availability and features of loans under the SBA’s Section 7(a) loan program. Businesses with 500 or fewer employees are eligible for the expanded loan program, as are sole proprietors, independent contractors, and self-employed individuals. There are many important details and benefits, including potential forgiveness. To learn more, please visit the SBA website at www.sba.gov or U.S. Chamber of Commerce website at www.uschamber.com.
The Families First Coronavirus Response Act
The U.S. Department of Labor’s Wage and Hour Division (WHD) published guidance to provide information to employees and employers about how each will be able to take advantage of the protections and relief offered by the Families First Coronavirus Response Act (FFCRA) when it took effect on April 1, 2020.
For more details including links to Employer and Employee Guides, and FAQs please click the following link: https://www.dol.gov/newsroom/releases/whd/whd20200324
The IRS has an overview of this act, as well as more information about how the employer will get reimbursed for the mandated sick leave. Please click on the following link:
Links to Additional Business Resources:
- Missouri Stay At Home Order: Business Guidance: Additional guidelines for business and waiver request form
- Missouri State resources for businesses can be found at ded.mo.gov/coronavirus
- The Missouri Small Business Development Center offers resources at https://sbdc.missouri.edu/sbdc-covid-19-resources
- United States Department of Agriculture: Outlines immediate relief opportunities for rural residents, businesses, and communities impacted by COVID-19
All employers should be implementing strategies to protect their workforce from the coronavirus while ensuring continuity of operations. Created by the U.S. Chamber of Commerce Foundation, these guides are based on information provided by the CDC, to help employers and employees prepare for and address the effects of the coronavirus.
- Coronavirus (COVID-19) Workplace Tips for Employees (PDF)
- Guidance For Employers To Plan and Respond To Coronavirus (PDF)
- Interactive Workplace Flyer Builder