PPP Forgiveness Process

New PPP Funding Approved

Included in the relief bill that Congress passed December 21st is approximately $280 Billion in additional PPP Funding. The SBA has released a new application, and FBSW is ready to begin processing them. Please see the link below to take you to the new application.

FAQ’s

Who is eligible to apply?
1. You have 300 employees or less
2. You can document a reduction of 25% or more in gross receipts in any quarter of 2020 when compared with the same quarter in 2019.
3. You were in operation on February 20, 2020
I already received a PPP loan, can I apply again?
1. Yes, as long as you have already used all funds from the original PPP loan.
What can I use the PPP funds for?
1. In addition to the previously allowable expenses (payroll, group health insurance, etc.), the following expense types have been added
  1. Covered Operations Expenditure — defined as a payment for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records, and expenses.
  2. Covered Property Damage Cost — defined as a cost related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation.
  3. Covered Supplier Cost — defined as an expenditure made by an entity to a supplier of goods for the supply of goods that are essential to the operations of the entity at the time at which the expenditure is made and is made pursuant to a contract, order or purchase order in effect at any time before the covered period with the respect to the applicable covered loan; or with respect to perishable goods, in effect before or at any time during the covered period with respect to the applicable covered loan.
  4. Covered Worker Protection Expenditure — defined as an operating or a capital expenditure to facilitate the adaptation of the business activities of an entity to comply with requirements established or guidance issued by the Department of Health and Human Services, the Centers for Disease Control, or the Occupational Safety and Health Administration, or any equivalent requirements established or guidance issued by a State or local government, during the period beginning on March 1, 2020 and ending on the date on which the national emergency declared by the President under the National Emergencies Act (50 U.S.C. 1601 et seq.) with respect to the Coronavirus Disease 2019 (COVID–19) expires related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID–19.May include—the purchase, maintenance, or renovation of assets that create or expand a drive-through window facility; an indoor, outdoor, or combined air or air pressure ventilation or filtration system; a physical barrier such as a sneeze guard; an indoor, outdoor, or combined business space; an onsite or offsite health screening capability; or other assets relating to the compliance with the requirements or guidance described above. Other kinds of personal protective equipment, as determined by the Administrator in consultation with the Secretary of Health and Human Services. Does not include residential real property or intangible property.

Form 2483-SD – Second Draw Borrower Application

FirstBank Southwest will continue to provide updates as new information is available.

On Friday June 5th, the Paycheck Protection Flexibility Act was signed into law. It made several notable changes to the program, with two key points.

Previously, in order to qualify or full loan forgiveness, a minimum of 75% of the loan proceeds had to be spent on payroll. That has now been reduced to 60%.
Originally, it was required that loan funds be completely utilized in the 8-week period following funding of the loan. This has now been extended to 24-weeks.

Supporting Documentation That Must be Submitted with the Application

Payroll:

Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or the Alternative Payroll Covered Period consisting of each of the following:

Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.
Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period:
1. Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
2. State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.
Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the Borrower included in the forgiveness amount.

FTE:

Documentation showing (at the election of the Borrower):

The average number of FTE employees on payroll per month employed by the Borrower between February 15, 2019 and June 30, 2019;
The average number of FTE employees on payroll per month employed by the Borrower between January 1, 2020 and February 29, 2020; OR
In the case of a seasonal employer, the average number of FTE employees on payroll per month employed by the Borrower between February 15, 2019 and June 30, 2019; between January 1, 2020 and February 29, 2020; or any consecutive twelve week period between May 1, 2019 and September 15, 2019.

Documents may include:

Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941)
State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.

Documents submitted may cover periods longer than the specific time period.

Nonpayroll:

Documentation verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period.

Business mortgage interest payments:
1. Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; OR
2. Lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments.
Business rent or lease payments:
1. Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; OR
2. Lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.
Business utility payments:
1. Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.

Original Application Available To All Borrowers

Instructions

In order to use the “EZ” application, the Borrower must answer “yes” to at least one of the following:

The Borrower is a self-employed individual, independent contractor, or sole proprietor who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form
The Borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period (as defined below) compared to the period between January 1, 2020 and March 31, 2020 (for purposes of this statement, “employees” means only those employees that did not receive, during any single period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000);ANDThe Borrower did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period. (Ignore reductions that arose from an inability to rehire individuals who were employees on February 15, 2020 if the Borrower was unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020. Also ignore reductions in an employee’s hours that the Borrower offered to restore and the employee refused.
The Borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period (as defined below) compared to the period between January 1, 2020 and March 31, 2020 (for purposes of this statement, “employees” means only those employees that did not receive, during any single period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000);ANDThe Borrower was unable to operate during the 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 borrower must confirm their eligibility to use the EZ form based on the instructions provided by the SBA.

EZ Loan Application – Some Restrictions Apply