Thank you for choosing Skowhegan Savings for your Paycheck Protection Program (PPP) loan. We are committed to providing you with the latest information and guidelines about loan forgiveness.
Loan forgiveness process - updated August 10th
On August 10th, the Small Business Administration (SBA) will release a new portal for PPP forgiveness applications. As the PPP program evolves, the SBA is continuing to refine and improve the forgiveness process. Please note at this time we are still encouraging PPP borrowers to wait to submit forgiveness applications as there is still hope that the process may get significantly streamlined by the Federal Government over the coming weeks. This page will continue to be updated with the latest information available.
PPP Flexibility Act Overview:
The Small Business Administration (SBA) has provided new rules and guidance for the PPP Flexibility Act that was signed into law on June 5th. A summary of the changes is below. You can review the full details by reading the interim final rule.
- The Flexibility Act will extend the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement, providing substantially greater flexibility for borrowers to qualify for loan forgiveness. Borrowers who have already received PPP loans retain the option to use an eight-week covered period.
- Lower the requirements that 75 percent of a borrower’s loan proceeds must be used for payroll costs and that 75 percent of the loan forgiveness amount must have been spent on payroll costs during the 24-week loan forgiveness covered period to 60 percent for each of these requirements. If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.
- Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity the business was operating at before February 15, 2020, due to compliance with requirements or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to worker or customer safety requirements related to COVID–19.
- Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020.
- Increase to five years the maturity of PPP loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020.
- Extend the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period).
- In addition, the new rules confirm that August 8, 2020 is the last date on which a PPP loan application can be approved.
Please reach out to your Commercial Lender with any additional questions.
Additional resources for your small business:
U.S. Small Business Administration Website
Learn more about PPP loan details and forgiveness.
U.S. Department of the Treasury Website
A resource to learn more about assistance that is available for small businesses.
Thank you for being a customer of Skowhegan Savings. We are grateful for the opportunity to serve you and are here to help you in anyway we can along the way. Visit our COVID-19 Resource Center to stay up to date on our response.