Top Tips To Get Your Paycheck Protection Program Loan Forgiven

Updated June 25, 2020

The SBA has resleased the Paycheck Protection Program Loan Forgiveness Application.

The application will be available on our client portal on Friday, June 26, 2020. If you meet the below conditions, you will be eligible to use the EZ application, that will be available on the client portal July 2, 2020. 

  • You did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the 24-week covered period (other than any reductions that arose from an inability to rehire individuals who were employees on February 15, 2020, if you are unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020, and reductions in an employee’s hours that a borrower offered to restore and were refused).
  • You were unable to operate between February 15, 2020, and the end of the 24-week covered period at the same level of business activity as before February 15, 2020 due to compliance with requirements established 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 the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19.

The Treasury has released a new Interim Final Rule (IFR) that provides more guidance on getting your PPP loan forgiven.

The revised IFR reflects the changes per the recent Flexibility Act signed on June 5, 2020. We have summarized the updates below:

  • You will not have to make payments on principal or interest for the loan if the forgiveness application is submitted to CBC within 10 months from the end of the covered period (now up to 24 weeks from funding date).
    • If the loan forgiveness application is NOT submitted by that date, payments on principal and interest will start.
  • The loan will be forgiven if at least 60% of funds are used for payroll costs (a reduction from 75%), and the remaining 40% used for other eligible expenses (up from 25%).
  • You now have until Dec. 31, 2020 to reinstate any reductions in full-time employees counts or in salaries / wages, without causing a reduction in forgiveness amount.
  • You can now submit the loan forgiveness application any time on or before the maturity date of the loan and the 24-week covered period, as long as you have used all of the loan proceeds. 
  • This is subject to the forgiveness reductions required by the Acts and IFRs. 

Click Here to Read the Full Interim Final Rule

Please be aware that guidance is subject to change from the Treasury and SBA. We will inform you as updated guidance is provided by the SBA.

Thank you for letting us support your business,

Ash Patel signature

Ash Patel, President & CEO of Commercial Bank of California

Updated June 5, 2020

Important update for all PPP clients! The President signed the Paycheck Protection Program Flexibility Act today to give you more flexibility on how to utilize your funds and to increase the likelihood of getting your loan forgiven. We have summarized the Act below:

  • You can now use your PPP loan to cover expenses for up to 24 weeks from your loan funding date, up from the initial 8-week cover period
  • It increased the current limitation on the use of loan funds for non-payroll expenses from 25% to 40%
  • The Safe Harbor period is extended from June 30 to December 31

Please be aware that we are still waiting for the final version from the Treasury and SBA, and there may be changes to the above parameters. We will inform you as updated guidance is provided by the SBA.

We are proud to support your business,

Ash Patel signature

Ash Patel, President & CEO of Commercial Bank of California

Updated May 28, 2020

Dear clients,

There are two new Interim Final Rules that were recently posted on the Treasury website.

  1. One pertains to additional guidance on PPP Loan Forgiveness
  2. The other adds insight on the future Loan Reviews by the SBA on PPP customer files

Please be advised that there is currently legislation being passed in Congress that will make changes to the PPP loan forgiveness guidelines, so please familiarize yourself and continue to stay tuned for more updates.

As always, it is our goal to keep you as informed as possible during these everchanging times. 

Thank you for letting us support your business,

Ash Patel signature

Ash Patel, President & CEO of Commercial Bank of California

Updated May 20, 2020

We want to keep you regularly updated as the Paycheck Protection Program (PPP) loan forgiveness guidance evolves. Today, we are pleased to share that the SBA and Treasury have released a first draft of the PPP loan forgiveness application for your review.

Please note that this version is subject to changes in the near future, so please familiarize yourself with the document as you reach the end of the 8 weeks from your loan disbursement date. We suggest you do not dedicate significant time in filling out the document until we know it is final. 

Click Here to Review the PPP Loan Forgiveness App

Thank you for letting us support your business,

Ash Patel signature

Ash Patel, President & CEO of Commercial Bank of California

 

Updated May 13, 2020

We know that receiving a Paycheck Protection Program loan may not necessarily make you whole, but we hope it helps you get through this unprecedented time so you can (hopefully) persevere on the backend of this pandemic.  

With that said, we want to remind you of some tips for using your money so you can ultimately get the funds forgiven. In the coming weeks, we will be providing you more details on the below.

Top Tips for Getting Your Paycheck Protection Program Loan Forgiven

  1. Maintain your separate bank account for PPP loan funds to help you track spending.
  2. You will need to submit a request for PPP loan forgiveness and we will give you those instructions.
  3. Maintain your full-time employee headcount. 
  4. Maintain total wages to at least 75% of pre-pandemic numbers.
  5. Be prepared to pay back any PPP loan funds not used.

Click Here to Read the Treasury's Most Recent FAQ

Other Important Paycheck Protection Program Reminders

  1. The eight-week period begins upon receipt of the funds.
  2. Payroll costs include more than wages.
  3. At least 75% of the funds must be used for payroll costs in order to get the loan forgiven.
  4. The other 25% can be used to pay utilities, rent and mortgage interest (incurred prior to Feb. 15, 2020)
  5. Forgiveness is reduced by a decrease in workforce.
  6. Forgiveness is reduced by a decrease in compensation.
  7. Accounting method is not specified.

We take pride in assisting our business community with Payment Protection Program loans. Because the Small Business Administration has not provided detailed guidance on loan forgiveness, we are only able to provide limited information on the requirements and process for loan forgiveness. 

After we receive specific guidance regarding loan forgiveness from the Small Business Administration, we may establish a forgiveness process for Payment Protection Program borrowers to follow. We urge you to work with your attorney, accountant or other licensed advisor to ensure your compliance with existing Payment Protection Program rules and regulations. A few places to check for the most recent regulatory guidance are: (i) www.treasury.gov/cares; and (ii) www.sba.gov.

Stay safe,

Ash Patel signature

Ash Patel, President & CEO of Commercial Bank of California