PPP Loan Forgiveness
Southside Bank is here to help as you use the funds from your SBA Paycheck Protection Program (PPP) loan.
SBA PPP Latest Updates
- The SBA has shared that borrowers will not be required to make their first payment until 16 months from the date of loan disbursement. This new date was set as a placeholder to allow the SBA time to review forgiveness requests prior to the first loan payment date. If a portion of the loan remains after the SBA has confirmed the forgiveness amount, a new payment schedule will be established.
- The SBA has a webinar available this week to discuss the loan forgiveness application and frequently asked questions. The Houston District Office of the SBA is providing a webinar hosted on the Microsoft Teams platform to assist you with the loan forgiveness application. Click here to access the appropriate webinar under “PPP Loan Forgiveness.”
SBA PPP Loan Forgiveness Application
The SBA has updated the loan forgiveness application and issued a new, simplified application for certain borrowers. In addition, the SBA has clarified that borrowers will be able to apply for forgiveness before the end of their covered period as long as all loan funds have been used.
Borrowers who received their loan prior to June 5 have the option to choose an 8-week or 24-week covered period. At this time, you do not need to notify Southside which option you are choosing. Borrowers who received their loan on or after June 5 automatically have a 24-week covered period.
Please note that the applications below are subject to change and there is no need to submit any information to Southside at this time. We will notify you when you are able to submit your application and supporting documents.
- An "EZ" application and instructions have been created for borrowers who meet one of the following criteria:
- Applied as self-employed, an independent contractor or sole proprietor with no employees
- Did not reduce any employee salary or wages by more than 25%, and did not reduce work hours for employees (with the exception of employees who refused an offer to return to work)
- Did not reduce any employee salary or wages by more than 25% during the covered period and experienced reduced levels of business operations as a result of health requirements related to COVID-19
- Borrowers who do not meet the criteria for the "EZ" application should reference the standard application and instructions.
SBA PPP Flexibility Act
On June 5, 2020, the Paycheck Protection Program Flexibility Act was signed into law. This Act modifies restrictions on PPP loan forgiveness and includes the following changes:
- Borrowers now have the option to extend the eight-week loan forgiveness period to 24 weeks. This is designed to make it easier to reach full or close to full forgiveness.
- The 75% payroll expenditure requirement has been reduced to 60%. Borrowers who allocate less than 60% of their PPP loan amount during the forgiveness covered period can still be eligible for partial loan forgiveness.
- There are a few exceptions for borrowers to receive full loan forgiveness even if their pre-pandemic personnel level is not restored. Borrowers can adjust if they were unable to:
- find qualified employees;
- resume business operations at Feb. 15, 2020 levels due to COVID-19 restrictions; or
- rehire employees at pre-pandemic hours and wages due to written good faith offers being turned down by employees.
- Borrowers are now allowed to postpone payment of payroll taxes. This was previously prohibited under the CARES Act.
The SBA interim final rule has been updated to reflect these changes.
- Please understand that while we’re here to help, your CPA and/or payroll provider should be able to answer more specific forgiveness questions regarding your loan.
- If you have general PPP questions, you may submit them using the form here.
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