PPP Loan Forgiveness

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 June 16th
The SBA has published a new simplified EZ forgiveness application. Unfortunately, a few key areas regarding the forgiveness application process remain unclear. The SBA has stated they will be providing more information in the coming days. In order to provide you with more accurate guidance, we are not accepting forgiveness applications at this time. Once clear guidance is made available by the SBA regarding required documentation and the submission process, we will accept forgiveness applications. The new EZ forms and instructions, as well as the original forgiveness forms, can be accessed using the links below. Please reach out to your commercial lender with any questions.
 
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 will confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved.
Please reach out to your Commercial Lender with any additional questions.
 
 
Resources for your small business:
  

U.S. Small Business Administration Website
Learn more about PPP loan details and forgiveness.

Visit the SBA(Opens in a new Window)



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.