Updated December 9, 2020
A Note to PPP Applicants
As Congress continues to negotiate additional stimulus measures, we wanted to provide you with some information you may find relevant when considering your next steps and the forgiveness process:
- Payments on your PPP Loan are deferred: Payments on your PPP loan are dictated by the terms of your note and any additional amendments or modifications to the note, but under the current PPP program rules payments are not required to be made during the period of time from the date that the loan is disbursed by Lender through either:
Covered periods are defined in section 1106(a) of the CARES Act.
- ) If the Borrower applies for forgiveness of a covered loan within 10 months after the last day of the “covered period” then:
- the date on which the amount of forgiveness, if less than 100% of the loan amount, is remitted to Lender, or
- the date on which Lender is notified by SBA that no loan forgiveness is allowed.
- ) If the Borrower does not apply for forgiveness within 10 months after the last day of the “covered period”, then upon the expiration of the 10th month following the last day of the “covered period”.
- Waiting the full 24 weeks may maximize the eligible amount to be forgiven: You have 24 weeks to use your PPP money, leaving you more time to qualify for full loan forgiveness. This increased flexibility in the time to use PPP funds can be important in maximizing loan forgiveness.
- Applying for forgiveness may become easier: Congress, the Department of the Treasury, and the SBA are discussing options to streamline the forgiveness application process even further for borrowers with small loan amounts. This could greatly reduce the amount of paperwork you will have to submit if your loan is subject to a more streamlined forgiveness process.
Once we receive clarity from Congress and the SBA on these matters, our present intention is to contact borrowers to discuss next steps. We recognize this has been a rapidly changing program that has been, at times, confusing. We understand that you are eager for more information on this topic, and we are dedicated to serving the needs of our clients. Our team is monitoring news and announcements related to the PPP and we are working to optimize our ability to serve your needs with respect to the forgiveness process. In the meantime, please maintain good records on any payroll, rent, mortgage interest, and utility expenses. Thank you for your understanding.
How to Prepare for Loan Forgiveness
The SBA published FAQ guidance regarding the loan forgiveness process. You can find that information here and we encourage you to review these FAQs. We also encourage you to review all additional information published by SBA on this topic. Please be aware that the retention of receipts for qualifying expenses and payroll may be needed in the future in connection with your loan forgiveness application and your PPP loan generally. As you begin preparing to submit your forgiveness application, you should consult with your professional advisors and consider taking the following steps:
- Separate PPP loan funds from other business expenses;
- Create a paper trail for qualified expenses;
- Keep supporting documents, including but not limited to, the following:
- Payroll documentation, such as check stubs, proof of ACH;
- Utilities Statements;
- Rent and mortgage proof of payments.
What are the next steps for loan forgiveness?
North Avenue Capital will contact each PPP customer with information on accessing the PPP Forgiveness application portal.
This page will be updated as resources from the Treasury and SBA are released.
Regarding Personal Information
We recently learned that PPP borrower’s personal information (including name, address, loan amount, and lender) was made public by the Small Business Administration (SBA). Neither Farm Credit Mid-America nor the Farm Credit System had any role in releasing this information. The Farm Credit System is aware of instances where PPP borrower information has been used by outside parties to fraudulently obtain additional loans from the Small Business Administration. Please be aware that the SBA released this information. We recommend that you closely watch any communications regarding SBA loans to ensure authenticity and continue to monitor your credit reports for unusual activity.
Report Suspected Fraud
If you are concerned about a fraud incident in relation to your PPP loan, please contact your Financial Officer immediately. As always, you may contact PaycheckProtectionProgram@e-farmcredit.com with any questions.
For updates directly from the Small Business Administration, please visit https://www.sba.gov/about-sba/oversight-advocacy/office-inspector-general/office-inspector-general-hotline
Please see the resources posted on the U.S. Treasury's website here: https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses.
Please email PaycheckProtectionProgram@e-farmcredit.com or FCMAemail@example.com
Farm Credit Mid-America does not provide legal or tax advice and you are advised, if you have legal or tax-related questions, to seek advice from your own legal and tax professionals.