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Paycheck Protection Program Loan Forgiveness

September 18, 2020

The SBA Paycheck Protection Program (PPP) provided critical funding to millions of small businesses. The First National Bank & Trust Company of Newtown is grateful for your trust and patience as we navigated the application and funding process together and now, as we embark on the forgiveness process.

Your PPP loan is eligible for forgiveness in an amount equal to the sum of the eligible payroll and non-payroll costs paid during your covered period of 24 weeks, or through December 31, 2020; whichever occurs first. However, you may choose to expend your PPP funds in 8 weeks. The covered period for your PPP loan began on the day your loan was funded.

Key points of PPP Loan Forgiveness:

  • Borrower has 10 months after the last day of the covered period to apply for forgiveness.
  • There is safe harbor from reductions in forgiveness, based on reductions in full-time equivalent employees (FTE), for borrowers that are unable to return to the same level of business activity prior to February 15, 2020, due to compliance with requirements/guidance between March 1, 2020, and December 31, 2020, by the SHHS, CDC, and OSHA.
  • There is safe harbor from reductions in forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to rehire individuals who were employees on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020.
  • Borrower must use at least 60 percent of the loan amount on payroll costs and may use up to 40 percent of the covered payroll costs for any payment of mortgage interest, rent, or utilities. All non-payroll costs must be in place/force before February 15, 2020.
  • If a borrower received an EIDL advance, the SBA is required to reduce the borrower’s loan forgiveness amount by the amount of the EIDL advance. 
  • If a PPP loan is not forgiven in full by the SBA (including if there has been a reduction in the forgiveness amount for an EIDL advance), the borrower must repay any remaining balance due by the loan maturity date.
  • The SBA has 90 days to review applications for forgiveness and make a determination on loan forgiveness, subject to any SBA review of the loan or application.

All PPP borrowers must complete the SBA forgiveness application Form 3508 or Form 3508EZ and upload all supporting documents through our online portal. Eight weeks after your loan funding, you will receive your first email from ESFSCMConfigurator@Fiserv.com inviting you to The First’s secure online portal. If you are ready to begin the forgiveness process, start by following the link from Fiserv.com. Please note, the business name you login with must exactly match the name on your invitation email from Fiserv.com. The business name and EIN may not contain punctuation. The online application and supporting documents submitted through the portal will be received by The First for review prior to submission to the SBA.

Many PPP borrowers are postponing the forgiveness process with the expectation that the Paycheck Protection Small Business Forgiveness Act will be enacted. This new legislation may greatly simplify the forgiveness application and documentation process for loans under $150,000. However, The First is encouraging you to begin the application process soon after your covered period ends in the event the legislation does not become law. If you receive the online invitation but are not ready to apply, please take some time to log into and navigate the portal to become familiar with it.

If you have any questions or if you have not received your invitation to the portal, please contact our PPP team at 215-579-3409, or email us at PPPQuestions@fnbn.com. Please refer to https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses and your accountant for additional guidance.

Thank you for your continued commitment to The First.

July 17, 2020

The SBA Paycheck Protection Program (PPP) has helped Small Businesses, like yours, keep their workforce employed during the COVID-19 crisis. The SBA will forgive loans if all employee retention guidelines are met, and the funds are used for eligible expenses. Please refer to https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses and consult with your accountant for guidance. Another good resource is https://bench.co/blog/operations/ppp-loan-forgiveness/.

The covered period for your PPP loan began on the day your loan was funded and ends 24 weeks after. If you have already exhausted your funds on payroll and other eligible expenses, you may elect to apply for forgiveness prior to the end of your 24 weeks.

You will be receiving an email from ESFSCMConfigurator@Fiserv.com inviting you to The First’s secure online portal to complete the forgiveness application and upload supporting documents. If you are ready to begin the forgiveness process, start by following the link from the next email you receive from Fiserv.com. Please note, the business name you login with must exactly match the name on your original PPP loan documents. Although the SBA is not yet ready to accept applications, your application and supporting documents will remain secure in the portal until transmission to the SBA is allowed. At that time, The First will transmit your application to the SBA. The SBA has 90 days to make a decision on each PPP forgiveness application. You will receive notice of the SBA’s decision through the portal. You are welcome to check the portal from time-to-time for the status of your forgiveness application.

All applications for forgiveness must be completed and processed through The First’s secure online portal. If this is not feasible for you and your business, please contact a member of our PPP team for support at 215-579-3409, or email us at PPPQuestions@fnbn.com.

The Paycheck Protection Program has experienced many changes since its first passage and The First’s communications have always been based on what we know at the moment. While questions remain about some of the forgiveness details, we will continue to keep you posted on the evolving process. For example, proposed new legislation, the Paycheck Protection Small Business Forgiveness Act would forgive PPP loans of $150,000 or less if the borrower submits a one-page attestation form to the bank. If this ACT passes, it may eliminate the complicated forgiveness application and the process of providing the supporting documentation.

Thank you for your continued patience as we navigate this process.

Please be aware of PPP scams. Do not respond to any email or phone inquiries unless you are certain the inquiry is coming from the bank or directly from this email, ESFSCMConfigurator@Fiserv.com.