FAQs:  Receiving and Repaying Funds

How can PPP loans be used?
According to the SBA guidance as of June 11, 2020 the proceeds of a PPP loan may be used for the following:

• payroll costs;
• costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
• mortgage interest payments (but not mortgage prepayments or principal payments);
• rent payments;
• utility payments;
• interest payments on any other debt obligations that were incurred before February 15, 2020, and / or
• refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020.

Please check the SBA PPP website for the latest guidance: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program (including, but not limited to, the “Frequently Asked Questions for Lenders and Borrowers” available at https://www.sba.gov/document/support--faq-lenders-borrowers. It is also recommended that you discuss the best use your PPP funds with your financial advisor, accountant, auditor, or legal counsel. 

When will I have to begin paying principal and interest on my PPP loan?
Under PPP rules as of June 11, 2020, borrowers are entitled to a deferral period after origination of their PPP loans. During the deferral period, a borrower is not required to make loan payments.  However, interest will continue to accrue on PPP loans during this deferment. As amended by the Paycheck Protection Program Flexibility Act of 2020, the deferral period for a PPP borrower will begin on the date of disbursement of the PPP loan and end on the date that the SBA remits the loan forgiveness amount on the borrower’s loan to the lender or notifies the lender that no loan forgiveness will be allowed. Except that, if the borrower has not applied for loan forgiveness within 10 months after the end of the borrower’s 24-week loan forgiveness covered period, the borrower’s deferral period will end and the borrower will be required to make loan payments according to the terms of the borrower’s loan beginning on that date.
 
Are there any fee waivers?

• There will be no up-front guarantee fees payable to SBA by the Borrower;
• There will be no lender’s annual service fees (“on-going guaranty fee”) payable to SBA;
• There will be no subsidy recoupment fees; and
• There will be no fee payable to SBA for any guarantee sold into the secondary market.

As you are aware, as part of the Small Business Administration (SBA) Paycheck Protection Program (PPP), some or all of your approved PPP loan may be forgiven by the SBA. 

Once our application portal is available, clients will receive an email with the necessary instructions to apply for forgiveness.

Here are a few highlights regarding SBA PPP Forgiveness:
 

• Forgiveness Webinar

         To assist businesses with this topic, we conducted a webinar in August 2020 on How to Navigate SBA PPP 
         Loan Forgiveness. To view this webinar, click here. 

         
 

• Applications

• Payroll

           The minimum percentage of a loan forgiveness request that must be based on eligible payroll costs has
           been reduced from 75% to 60%, allowing more of the funds to be used on other qualifying expenses.
 

• Covered Period

           For loans that received SBA approval after June 5, 2020, the covered period is 24 weeks.For loans that
           received SBA approval on or before this date, the covered period is the borrower’s choice of either 8 weeks
           or 24 weeks. However, all covered periods end on or before December 31, 2020.
 
We have received a number of questions regarding PPP payments as they relate to The Flex Act that was passed a few weeks ago.  Here is the SBA’s official language, but essentially, you have time.
 

• If you submit to your lender a loan forgiveness application within 10 months after the end of your loan forgiveness covered period, you will not have to make any payments of principal or interest on your loan before the date on which SBA remits the loan forgiveness amount on your loan to your lender (or notifies your lender that no loan forgiveness is allowed).


• If you do not submit to your lender a loan forgiveness application within 10 months after the end of your loan forgiveness covered period, you must begin paying principal and interest after that period.

We have a few Questions and Answers we thought would be helpful:
 

How can I apply for forgiveness?

You will receive an email communication from us when you are eligible, based on your PPP Loan disbursement date, and our PPP Forgiveness portal is available to take applications.  We are preparing our portal for launch under current rules for PPP forgiveness as we monitor updates from Congress or the SBA on potential changes. We will continue to provide updates to you.
 

What is included on the application?

The standard application (SBA Form 3508) has the following components: (1) PPP Loan Forgiveness Calculation Form; (2) PPP Schedule A; (3) the PPP Schedule A Worksheet; and (4) the (optional) PPP Borrower Demographic Information Form.
 
The streamlined application (SBA Form 3508EZ) has the following components: (1) PPP Loan Forgiveness Calculation Form; and (2) the (optional) PPP Borrower Demographic Information Form.

The SBA, in consultation with the Treasury Department, released a simpler loan forgiveness application for PPP loans of $50,000 or less (other than loans received by borrowers that, together with their affiliates received PPP loans in excess of $2 million, who cannot use the new form). This includes a new Application, 3508S. The full release can be found here.
 

How do I submit my request?

We will provide you with access to our PPP Forgiveness portal, where you will complete an online application. As part of this online application, we will have the following fields prefilled for you:
 

• SBA PPP Loan Number
• Lender PPP Loan Number
• PPP Loan Amount
• PPP Loan Disbursement Date

Please note, this submission will be required to be online and we will not be accepting paper or emailed applications.
 

Where do I find instructions on how to complete the application?

The SBA’s initial application instructions are contained on Form 3508 here.  The application form also contains various applicable definitions including definitions of eligible payroll and nonpayroll costs, the covered period, and an alternative payroll covered period.  It also includes application table instructions, and descriptions of certain standards relevant to determining loan forgiveness including standards for calculating FTEs, reducing forgiveness based on reduction in FTEs, FTE reduction exceptions, and a FTE reduction safe harbor. The SBA may issue further rules and guidance relevant to PPP forgiveness applications, so any instructions included on Form 3508 should be assessed in light of any additional information made available by the SBA.

If you would like to review the instructions for Form 3508EZ, please reference the SBA form here.

As you access your application through our systems, you may be provided certain instructions about how to access and use our online portal. We will not, however, provide legal, financial, tax, or similar advice in connection with your forgiveness application. If you have questions about forgiveness requirements please consult with your attorney, accountant, financial advisor, or other relevant advisors for assistance.
 

What qualifies for forgiveness?

Eligible loans may be forgiven if the funds are used for eligible payroll costs, interest on business mortgages, business rent or leases, and business utility payments in accordance with the PPP’s requirements.  In addition to other requirements, at least 60% of the forgiven amount must have been used for eligible payroll costs.  
 

How many times can I submit for forgiveness?

A business entity can only apply to the SBA for PPP loan forgiveness once, so please be sure to take the time to understand the forgiveness application, including consulting with relevant advisors, such as your attorney, accountant, and financial advisor, as you prepare for this next step in the PPP process so they can help with any questions or concerns.

Will Atlantic Union Bank provide any information required on the SBA forgiveness application?

You will receive log in instructions to complete an electronic version of the SBA PPP Loan Forgiveness Application.  In that application, we will pre-fill the following fields of the application: SBA PPP Loan Number, Lender PPP Loan Number, PPP Loan Amount and PPP Loan Disbursement Date.

What should I do to prepare as I wait for the online/digital application from Atlantic Union Bank?

In preparation for the PPP forgiveness process, please download the PPP Forgiveness Application relevant to your circumstances (SBA Form 3508 or SBA Form 3508EZ, as applicable) and application instructions available from the SBA, here and start working on your PPP Loan Forgiveness Calculation Form and, if applicable, PPP Schedule A.
 

What needs to be prepared so that I am ready to submit for forgiveness of my SBA PPP loan?

When it is time and you are ready to submit for forgiveness, you will need to have ready to provide: (i) the PPP Loan Forgiveness Calculation Form; (ii) PPP Schedule A (unless you will be using the streamlined application on SBA Form 3508EZ); and (iii) any applicable documentation that you are required to submit in connection with your application, as outlined in the instructions for SBA Form 3508 or SBA Form 3508EZ, as applicable.
 

How long will it take for me to get a decision on my Forgiveness Application?

After receiving your completed application and all required supporting documentation Atlantic Union Bank will review its contents. We may follow up with you if any part of your application is incomplete or requires clarification. Within 60 days of receipt of a completed application, we will issue an initial decision to the SBA regarding loan forgiveness. Subject to any further review of the loan or application, the SBA has 90 days from receipt of our initial decision to review the application and remit the appropriate forgiveness amount to Atlantic Union Bank.

You can continue to check the SBA dedicated PPP website https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program (including, but not limited to, the “Frequently Asked Questions for Lenders and Borrowers” available at https://www.sba.gov/document/support--faq-lenders-borrowers) and the page dedicated to PPP on our website (https://www.atlanticunionbank.com/sba-ppp) for the latest updates. If you have questions, you may reach out to us at PPPForgiveness@AtlanticUnionBank.com or 1-866-742-8150.
 
 
Thank you again for letting us service your business needs.
 

 
For help with SBA's Disaster Loan Assistance website, please contact the disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or by e-mail at disastercustomerservice@sba.gov.
 
Clients can also contact their local SBA office for advice. https://www.sba.gov/local-assistance/find/?q=Virginia&pageNumber=1.

 

Over the course of the PPP, we have worked hard to be a good partner to our customers in their time of need and a strong corporate citizen. While we were accepting applications for new PPP loans, we worked diligently to process and approve as many applications for loans as possible. As we shift into the forgiveness process and servicing of the PPP loans we originated, we will apply the same diligence to those phases, as well. We have not done this because we are required to.  We view this as our patriotic duty and a moral responsibility we must accept. The more small businesses we can help, the more Americans we keep employed and the stronger the recovery we can expect once this is all over.  This is not just about our business clients. It is about their employees and ensuring they can continue to earn a paycheck. It is about their families that count on them for the income that pays their mortgage, puts food on the table, and pays their utilities.  Thank you to our clients for trusting us with your banking relationship.