Thank you again for choosing INB to provide your loan under the Paycheck Protection Program (PPP). The Small Business Administration (SBA) and Treasury Department have announced forgiveness applications will be accepted beginning August 10. Barring any changes to the program or start date, INB intends to begin submitting applications for forgiveness at that time. Because there could be more changes to the program, we recommend holding off on your application and staying in close contact with your INB lender. For example, US Treasury Secretary Steven Mnuchin has asked legislators to consider blanket forgiveness for loans under some amount; though this is unspecified, one often quoted number is $150,000. If that happens, it’s possible that you will be able to complete a much simpler, streamlined application for loans under that threshold. Therefore, it may be a good idea to wait until some of these items are clarified in the coming weeks.
In the meantime, if you wish to submit an application for forgiveness, we have identified two forms you would need to complete; they are attached to this letter. If your business fits certain criteria, you can and should submit Form 3508EZ. Otherwise, you will need to submit Form 3508. Certain information noted below must accompany those forms when you submit them to INB. These items are subject to change based on guidance from the SBA/Treasury, and they are noted on the Loan Forgiveness Application Instructions of the applicable form.
PPP Loan Forgiveness Calculation Form 3508EZ (instructions)
PPP Loan Forgiveness Calculation Form 3508 (instructions)
PPP Schedule A (if using Form 3508)
Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or the Alternative Payroll Covered Period consisting of each of the following:
1. Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.
2. Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period:
i. Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
ii. State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.
3. Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the Borrower included in the forgiveness amount.
4. If using 3508EZ and you checked only the second box on the checklist on page 1 of those instructions, the average number of full-time equivalent employees on payroll employed by the Borrower on January 1, 2020 and at the end of the Covered Period.
FTE (if using Form 3508): Documentation showing (at the election of the Borrower):
- the average number of FTE employees on payroll per week employed by the Borrower between February 15, 2019 and June 30, 2019;
- the average number of FTE employees on payroll per week employed by the Borrower between January 1, 2020 and February 29, 2020; or
- in the case of a seasonal employer, the average number of FTE employees on payroll per week employed by the Borrower between February 15, 2019 and June 30, 2019; between January 1, 2020 and February 29, 2020; or any consecutive 12-week period between May 1, 2019 and September 15, 2019.
The selected time period must be the same time period selected for purposes of completing PPP Schedule A, line 11. Documents may include payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941) and state quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state. Documents submitted may cover periods longer than the specific time period.
Nonpayroll: Documentation verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period.
- Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; or lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments.
- Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.
- Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments
Attached to this letter is the latest Frequently Asked Questions (FAQs) on PPP Loan Forgiveness. The FAQ, application forms, and application form instructions may be updated periodically and can be found at: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
Please work with your INB lender to determine when you should apply for forgiveness. Once you communicate with your lender, he/she will be able to provide you with a link to securely transfer the application form and all associated documents to us so we can begin processing the application. Once we have received a complete application, we will process it and submit to the SBA within 60 days. After that time, the SBA will have up to 90 days to review the application. INB will notify you when the application has been submitted and again when the decision is made as to whether the application will be approved or denied.
The links and information in this letter may continue to change as further guidance is released by the SBA, however, all of the eligibility rules may be found at https://www.sba.gov.
Thank you again for entrusting us to be your business partner. We are here to help you; please call us with any questions about the PPP program at 217-747-5500 or visit our website at www.inb.com/sba.