October 15, 2020
Greetings,
The Small Business Administration recently announced a streamlined process for Paycheck Protection Program loan forgiveness, as stated in the latest PPP Interim Final Rule. The simplified process only applies to PPP Loans that are $50,000 or less as long as the borrower does not jointly have PPP loans $2 million or greater with any of its affiliates. Some of the features to this new streamlined process include:
- A streamlined application (SBA form 3508S).
- Exemptions for any reduction in forgiveness amount based on reductions to FTE salaries or employee wages.
While the application has been streamlined there are supporting documents that are still required with your forgiveness application. The list of required supporting documentation is listed in the SBA form 3508S instructions. It is very important that you read the instructions and submit the required documents, as we will not be able to process your application without it.
For Loan Amounts Greater Than $50,000
For loan amounts that are greater than $50,000, you would still use the 3508EZ application or the 3508 application and include the required documentation. Follow the instructions on the form for a list of what documents are required. As we have suggested in previous communications, for any self-employed borrowers and independent contractors that do not use a payroll company to pay themselves, we recommend still paying yourself in some way. That can be in the form of writing yourself a check and including a memo referencing payroll or a transfer between accounts with a comment referencing payroll. While it may not seem to make sense to do this, this is what has been suggested to us by our SBA representative to do to document your payroll.
Already Submitted a PPP Application?
As an update to any members who have submitted PPP Forgiveness applications already, the SBA has just started processing those applications and remitting funds to lenders to forgive these loans. We want to remind borrowers that the SBA has up to 90 days to process completed PPP forgiveness applications.
Other Resources
Here are some other resources that are available if you are continuing to experience hardships from the COVID-19 pandemic. While some businesses are starting to settle into a new normal or are easing back into their business volume, many are still struggling and in need of help.
- The State of Maine recently announced phase II of the Economic Recovery Grant Program. For those that looked into the first round but did not qualify, we encourage you to look into this round as there have been some changes allowing some businesses to now potentially qualify for it.
- UCU has partnered with the Town of Orono to offer the Orono Business Relief Loan. This loan is a 0% interest rate loan with 6 months of payment deferral. This loan is only offered to businesses located in Orono. There are also other grant and loan programs that municipalities throughout the state are offering as well.
- There are also several agencies throughout the state that are specializing in helping businesses get through the pandemic like SBDC Maine, SCORE, CEI and EMDC. All of these organizations have business advisors to help you and your business navigate these tough times.
Reach Out
For any business owners that may be experiencing difficulties, please do not hesitate to reach out to us. We are here for you and to help you find resources. If you have any questions please do not hesitate to reach out to us at businesslending@ucumaine.com or 800-696-8628. We are happy to help however we can.
Derek Hebert
Business Services Manager
The post Updates to Paycheck Protection Program appeared first on University Credit Union.