To Our Small Business Clients 

SBA Paycheck Protection Program Loan and Forgiveness Guidance:

The Small Business Administration released a three-page “EZ” Paycheck Protection Program loan forgiveness application requiring less documentation and fewer calculations than previously required. Form 3508EZ applies to borrowers who meet any one of these three criteria:‌

• Applied for the PPP loan as self-employed, an independent contractor or a sole proprietor with no employees.
• Did not reduce salary or wages for any employee by more than 25%, and did not reduce the number or hours of their employees (excepting laid-off employees who refused an offer to return).
• Did not reduce salary or wages for any employee by more than 25% during the covered period and experienced reductions in business activity as a result of health directives related to COVID-19.

SBA PPP Loan Forgiveness Application Form 3508EZ*

SBA PPP Loan Forgiveness Application Form 3508EZ Instructions For Borrowers

If your business does not fall into one of the three categories above, the following needs to be completed:

SBA PPP Loan Forgiveness Application Form

SBA PPP Loan Forgiveness Instructions

*Please note that we are working towards an online portal for submission of the application and supporting documents that will be used for forgiveness determination in accordance with information from the SBA.  However, we wanted to ensure that you had these documents for planning purposes.  Additional guidance is still anticipated.

SBA PPP Interim Final Rule - June 22nd

SBA PPP Interim Final Rule - June 17th

SBA PPP Interim Final Rule - Loan Forgiveness

SBA PPP Interim Final Rule - Loan Review Procedures and Related Borrower and Lender Responsibilities

SBA PPP Frequently Asked Questions

There have been a number of recent changes to the Paycheck Protection Program, particularly as relate to the forgiveness of the loans made through the program.  Fortunately, these changes are ones that are favorable to borrowers, and should result in forgiveness that is easier to obtain than that originally legislated and promulgated.

Major points regarding the changes have been released by the SBA:

• The guidance extends the loan forgiveness period from 8 to 24 weeks after loan disbursement.  Borrowers who have already received PPP loans retain the option to use the eight-week covered period.
• The guidance lowers the requirement for payroll costs for loan forgiveness from 75% to 60%. If a borrower uses less than 60 percent for payroll, the borrower remains eligible for partial loan forgiveness.
• The guidance provides loan forgiveness safe harbor based on reductions in full-time equivalent (FTE) employees for borrowers who are unable to return to the same level of business at which they were operating before February 15, 2020 due to compliance with COVID-19 requirements or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration.
• The guidance provides loan forgiveness safe harbor based on reductions in FTE for borrowers unable to rehire employees or hire similarly qualified employees for unfilled positions by December 31, 2020.
• The guidance increases to 5 years the maturity of PPP loans approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020.
• The guidance extends the deferral period for payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, ten months after the end of the borrower’s loan forgiveness covered period).

We are working with a third party to provide an online forgiveness portal to help streamline the process for our PPP customers to apply for forgiveness of their PPP loans.  Further guidance from the SBA is still anticipated, and thus the portal has not been finalized.  As soon we obtain the awaiting pending guidance from the SBA, we will notify you via email that the portal is available.

SBA Interim Final Rule - April 2nd

SBA Interim Final Rule - April 14th

SBA Interim Final Rule - April 24th

SBA Interim Final Rule - April 28th - Seasonal Employees

SBA Interim Final Rule - April 28th - Disbursements

SBA Interim Final Rule - April 30th  

Interim Final Rule on Additional Revisions to First Interim Final Rule - June 12th

Some information about the program and the bank’s administration of the program:

1. The CARES Act includes language that will allow all banks to participate in the SBA Paycheck Protection Plan (PPP) loan program, and we are already an SBA 7 (a) lender.
2. Andrew Johnson Bank is participating, and it is our honor to do so.
3. These loans will be available to businesses, including self-employed and independent contractors, non-profits (501c3), and others with less than 500 employees to assist with their payroll and other business operating expenses.
4. We are participating in daily calls with the Tennessee division of the SBA, and we know that the Treasury and SBA are working as quickly as they can.  Furthermore, we are hopeful to have a complete picture of the program very soon. 
5. Please know that even as these rules and guidelines are being drafted, our bank is preparing as best we can with the information we have been provided (which again is limited for ALL banks and other SBA lenders).
6. We will process requests for both customers and non-customers, and welcome the opportunity to make new friends!  If you are a customer, we thank you and also invite you to introduce us to one of your friends (virtually of course, for right now).
7. As a quick recap, according to the Treasury, the PPP loan program is for:
   - Payroll costs, including benefits
   - Interest on mortgage obligations, incurred before February 15, 2020
   - Rent, under lease agreements in force before February 15, 2020
   - Utilities, for which service began before February 15, 2020
8. According to the Treasury, the targeted availability dates are:
   - Starting April 3, 2020, small businesses and sole proprietorships can apply for loans to cover their payroll and other certain expenses.
   - Starting April 10, 2020, independent contractors and self-employed individuals can apply for loans to cover their payroll and other certain expenses.

Note that while the date of April 3rd is targeted for the first round of applications, it is also the date targeted for the release of the structure, rules, and guidance for the entire program to everyone.