COVID-19 SBA Paycheck Protection Program

UPDATED

8.28.20

 Dear PPP Loan Borrower:

We are writing to inform you of certain changes in your Paycheck Protection Program (“PPP”) loan you obtained from Citizens Bank. 

On June 5, 2020, the Paycheck Protection Program Flexibility Act of 2020 (the “PPPFA”) was signed into law.  The PPPFA amended PPP and the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), under which your loan was originally made.  The new law makes the following changes to existing PPP loans such as yours.

• Borrowers may choose to apply for forgiveness of qualifying expenses incurred during a 24-week “covered period” after their loan was disbursed (the previous law limited forgiveness to expenses incurred during the eight weeks following loan disbursement). Borrowers may still apply for forgiveness pursuant to the eight-week covered period.

• The deferral period, during which no payments of principal or interest are required, has been extended to the earlier of (a) the date when Citizens Bank receives reimbursement of the loan forgiveness amount from the Small Business Administration (“SBA”), or (b) ten (10) months after the end of the “covered period” (the previous law required a six-month deferral period).

• Forgivable expenses must consist of at least 60% payroll costs (the previous law required that at least 75% of the requested forgiveness amount consist of payroll costs).

These changes affect the terms of your loan.  The certification executed in connection with your loan provides that the note is automatically amended to reflect any changes to the CARES Act.  Accordingly, your note will be automatically amended to reflect the changes above.

The PPPFA made other changes to the PPP that, while they do not affect the terms of your loan, may help you obtain forgiveness if you are unable to rehire employees, if you are unable to hire similarly qualified employees, or if you were unable to return to previous levels of business activity due to the need to comply with certain public health requirements or guidance. 

This letter is not intended to be a comprehensive summary of the PPPFA and is qualified in its entirety by the text of the statute and any regulations and guidance that may be issued in the future.  You are encouraged to read the PPPFA and consider how it affects your particular circumstances. 

Please note that you may elect to submit your forgiveness application for the eight week period or the 24-week period.  Borrowers who have sufficient forgivable to expenses to receive forgiveness of 100% of their loan based on the eight week covered period may want to choose to apply for forgiveness after the eight weeks rather than waiting.  If you choose to use the 24-week period, you may submit your forgiveness application prior to the end of the 24-week period if you have sufficient forgivable expenses to receive forgiveness of 100% of your loan.

Sample dates for clarification: 

Be sure you are using your disbursement date as the beginning date of your covered period. 

You will also find a checklist for the 3508 and 3508 EZ and the actual PPP Loan Forgiveness applications.

Click here to view the Checklist.

Click here to view the E-Z Application 3508EZ.

Click here to view the Full Forgiveness Application.

5.18.20

SBA and Treasury Release PPP Loan Forgiveness Application

On Friday, May 15, 2020, the SBA and Treasury issued the following Press release:

WASHINGTON —Today, the Small Business Administration (SBA), in consultation with the Department of the Treasury, released the Paycheck Protection Program (PPP) Loan Forgiveness Application and detailed instructions for the application. 

The form and instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities. 

The 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
• Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
• 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 30
• 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

The PPP was created by the CARES Act to provide forgivable loans to eligible small businesses to keep American workers on the payroll during the COVID-19 pandemic. The documents released today will help small businesses seek forgiveness at the conclusion of the eight week covered period, which begins with the disbursement of their loans.

Click HERE to view the application and instructions.

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For assistance or questions, we would ask that  you contact your local Citizens Bank Banking Center CEO or Citizens Bank Gladewater CEO Luke Kimbrough via email or by phone at 903-845-5566. Luke will make certain that you are put in contact with the right lender to assist you with your application.

‌Learn more at treasury.gov/cares. 

April 24, 2020

House passes $484 billion bill to boost small businesses 

31. Question: Do businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?

Answer: In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application. Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification. Lenders may rely on a borrower’s certification regarding the necessity of the loan request. Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.  SBA is extending the repayment date for this safe harbor from May 7, 2020 to May 14, 2020!

43. Question: FAQ #31 reminded borrowers to review carefully the required certification on the Borrower Application Form that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA guidance and regulations provide that any borrower who applied for a PPP loan prior to April 24, 2020 and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith. Is it possible for a borrower to obtain an extension of the May 7, 2020 repayment date?

Answer: SBA is extending the repayment date for this safe harbor to May 14, 2020. Borrowers do not need to apply for this extension. This extension will be promptly implemented through a revision to the SBA’s interim final rule providing the safe harbor. SBA intends to provide additional guidance on how it will review the certification prior to May 14, 2020.

Treasury Issues Guidelines, Application Form for SBA Paycheck Protection Program Loans

Applications to Begin April 3

ASSISTANCE FOR SMALL BUSINESSES

The Paycheck Protection Program prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses.

Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or who are independent contractors, are eligible if they also meet program size standards.

• For a top-line overview of the program CLICK HERE
  
• If you’re a borrower, more information can be found HERE (Revised 4.3.20)
• The REVISED (as of 4.3.20) application for borrowers can be found HERE
• For detailed FAQ's, visit The Small Business Owner's Guidebook to the CARES Act
  
• 4.3.20 - U.S. Treasury and SBA issues Interim Final Ruling for Business Loan Program Temporary Changes; Paycheck Protection Program