PPP Loan Forgiveness FAQs

 
Looking for information about the SBA Paycheck Protection Program (PPP)? Please visit our PPP CARES Act FAQs to learn more.
 

What You Need To Know

Important Update: The Small Business Administration (SBA) published guidance on Loan Forgiveness for the Paycheck Protection Program (PPP).

Funding remains available through the Small Business Administration (SBA) Paycheck Protection Program (PPP), Seacoast Bank will continue to support Florida businesses through the application process and will accept applications through Friday, June 26th. Please note Seacoast will not accept applications after this date.

The SBA PPP first opened to applicants on April 3rd as part of the landmark Coronavirus Aid, Relief, and Economic Security (CARES) Act. Recent action from Congress and the administration to pass the PPP Flexibility Act has made significant changes to both the origination and forgiveness processes to provide greater relief for small business owners. These changes include:


    • Extended covered period
      The Act lengthened the time that businesses have to incur costs to 24 weeks, so they may have more expenses eligible for forgiveness.

    • Flexibility on covered expenses
      The new rules require only 60 percent of the forgiveness amount to be used for payroll, while the rest can be used for non-payroll costs such as mortgage interest, rent and utilities.

    • Extended maturity date and payment deferral period
      New loans will have a 5-year term. Borrowers will not have to start making payments until the SBA has completed its review of the borrower’s application for loan forgiveness. If the borrower does not apply for loan forgiveness within 10 months after the end of the covered period, payments must begin at that time.

Additionally, the SBA continues to guide that Loan Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:

    • Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles.
    • Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness.
    • Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30th.
    • Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined.

 

Frequently Asked Questions


    • When will I be eligible to apply for forgiveness?  New federal legislation, signed into law on June 5th, 2020, contains several important modifications to the PPP loan forgiveness process. As expected that the U.S. Treasury and SBA published updated guidance stating in part the forgiveness period is define as the 8 or 24 week period from date of PPP funding. Once you are eligible to apply for loan forgiveness, we’ll email you with instructions and a unique link to begin the application.

    • How can I prepare to apply for loan forgiveness?  For more information on the application, the types of costs that are eligible for forgiveness, and what documentation you will need to submit in connection with your application, please review the Paycheck Protection Program Loan Forgiveness Application on the SBA website (the “SBA Forgiveness Application”). Seacoast strongly recommends that, prior to applying through our online portal for loan Forgiveness, you review and fill out the SBA Forgiveness Application, including the PPP Loan Forgiveness Calculation Form, PPP Schedule A and PPP Schedule A worksheet and gather the supporting documentation required to be submitted. The required documentation is defined in the in the SBA Forgiveness Application.

    • Who determines the amount of loan forgiveness?  The U.S. Treasury and Small Business Administration (SBA) are responsible for the rules of the program which determine the amount of loan forgiveness you may receive. This can include full, partial or no forgiveness.

    • How do I request loan forgiveness from Seacoast Bank?   If you received a Small Business Administration (SBA) Paycheck Protection Program (PPP) loan from Seacoast bank, we will email you with instructions on how to initiate the loan forgiveness process. Forgiveness is NOT automatic, and must be requested through Seacoast Bank.
Please stay informed. While Seacoast will continue to post periodic updates here on our website, we encourage you to review guidance and updates from the Treasury (Treasury) and SBA websites for the most up-to-date program rules and guidance. You may also read the complete Joint Statement by Treasury and SBA regarding the PPP Flexibility Act.

 

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