Important Information Regarding Your PPP Loan with CBOTS
As a recipient of the early distribution of the Paycheck Protection Program loan proceeds, the time frame for submitting application for partial/full loan forgiveness has begun. At the time your loan was originated, the terms stated that the PPP loan proceeds would be expended during the 8-week period following receipt of the funds. Based on the use of funds during that time period would determine the amount of the loan subject to be forgiven; however, as part of some recent program amendments, this time frame has been extended to 24-weeks. The goal of this extended period was to allow more time for the borrower to spend the funds on covered/forgivable expenses.
Recent changes/rule expansions have provided additional leeway to borrowers. In addition to the option of selecting an extended covered period, the SBA has released a Form 3580EZ, which is intended to be a more simplified application and is available to the following borrowers: (1) sole proprietors with no additional employees during the covered period, (2) a business owner that did not reduce the salaries/hourly wages of its employees by more than 25% during the covered period or (3) a business owner unable to operate during the covered period. (Please see the form instructions for specific criteria on qualification.)
The basic process for the request of partial/full loan forgiveness is as follows:
- Borrower completes the Form 3508EZ (or Form 3508, if unable to meet requirements for EZ form)
- Submit the form, along with supporting documentation to CBOTS via the PPP Portal (supporting documentation requirements is listed on the 3508 form instructions)
- CBOTS will review the application and documentation for reasonableness and mathematical accuracy; regulation allots lenders 60 days from receipt of the application to issue a decision
- CBOTS will notify the borrower of the forgivable amount
- CBOTS will forward application and loan forgiveness information the SBA
- SBA will notify CBOTS of approval/denial of application within 90 days
- If any portion of the loan is not forgivable and therefore the responsibility of the borrower for repayment, CBOTS will notify the customer of the first payment date and required payment amount
As we have all been working together to get this relief to business owners, we will continue to work with our customers throughout the remainder of this program.
Per the official guidance from the SBA:
Providing an accurate calculation of the loan forgiveness amount is the responsibility of the borrower, and the borrower attests to the accuracy of its reported information and calculations on the Loan Forgiveness Application Form. Lenders are expected to perform a good-faith review, in a reasonable time, of the borrower’s calculations and supporting documents concerning amounts eligible for loan forgiveness.