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The Paycheck Protection Program for business owners

An important update

The United States capitol building on a sunny day. Washington D.C., U.S.A.

New legislation signed into law on July 4 has authorized the Small Business Administration (SBA) to approve Paycheck Protection Program (PPP) loan applications through August 8, 2020.  This is an extension from the SBA’s original deadline of June 30, 2020.

With this extension, Bank of America began to accept new PPP loan applications at 5:00 p.m. ET on July 6. 

In order to provide the necessary time for processing prior to the SBA’s updated August 8 deadline: 

  • We will accept new PPP loan applications until 5:00 p.m. ET on July 24.
  • Applicants must provide all required supporting documentation (this does not include promissory notes) by 5:00 p.m. ET on July 31 in order for their application to proceed.
  • We will discontinue all application processing at 5:00 p.m. ET on August 7. Clients who applied, but have not received a SBA loan number by the time of the SBA’s August 8 cutoff, will be notified their application will not be processed and has been cancelled.

For clients who received a PPP loan from the SBA through Bank of America, we look forward to supporting you as you begin the loan forgiveness phase of the program.  We will begin opening our online loan forgiveness application in early August and will be emailing you with additional instructions on how and when to apply.

For up-to-date rules for the SBA’s PPP loan forgiveness process, including your covered period, the types of costs that are eligible for forgiveness, and what documentation you will need to submit as part of your application, please visit the SBA website

FREQUENTLY ASKED QUESTIONS

General

What is the Paycheck Protection Program (PPP)?
The Paycheck Protection Program is a federal relief program established by Congress and implemented by the U.S. Treasury Department and the Small Business Administration (SBA) with rules, requirements, protocols and processes that all participating banks, including Bank of America, must follow. For more information on the Paycheck Protection Program, please visit the U.S. Treasury and SBA websites.

What changes has the SBA to the PPP rules and how does that impact the loan forgiveness process? 

  • You now have a 24-week “covered period,” the period in which you must spend the PPP loan proceeds for full loan forgiveness, starting on the date the funds were disbursed. If your PPP loan was funded prior to June 5, 2020, you still have the option to use the original 8-week covered period.
  • You must use at least 60% of funds for eligible payroll costs to qualify for full loan forgiveness, down from 75%
  • You can use up to 40% of funds for eligible non-payroll costs, up from 25% 

You can find up-to-date information on the rules of the program on the SBA website. 

Application

Is Bank of America taking new PPP loan applications?
Yes. We opened our online PPP loan application to eligible clients at 5:00 p.m. ET on July 6. In order to provide the necessary time for processing:

  • We will continue to accept new PPP loan applications until 5:00 p.m. ET on July 24. 
  • Applicants must provide all required supporting documentation (does not include promissory notes) by 5:00 p.m. ET on July 31 in order for their application to proceed.
  • We will end all application processing at 5:00 p.m. ET on August 7. Clients who applied, but have not received a SBA loan number by the time of the SBA’s August 8 cutoff, will be notified their application will not be processed and has been cancelled.

Will Bank of America pay fees to third-party agents who have assisted clients with the preparation of PPP loan applications?
In the absence of a pre-loan approval written agreement between the agent and Bank of America, Bank of America does not pay fees or other compensation to agents who represent or assist borrowers through the Paycheck Protection Program. 

Eligibility

What are the eligibility requirements under the provisions of the Paycheck Protection Program?
The eligibility requirements are outlined for applicants on the U.S. Treasury website and SBA website.

The Small Business Administration (SBA), in consultation with the Department of the Treasury, continues to provide additional guidance to address borrower and lender questions concerning the implementation of the Paycheck Protection Program (PPP) in the form of updated Frequently Asked Questions.

It is your obligation to be informed of the latest guidance from the Treasury and SBA related to the Paycheck Protection Program. This guidance can be found at Small Business Administration website, U.S. Treasury's website on Assistance for Small Businesses and the U.S. Treasury’s Frequently Asked Questions page.  Program guidelines are subject to change, and we urge applicants to stay informed of evolving requirements.

For example, the Treasury published an FAQ on April 23 that Bank of America wants to bring to your attention:

From SBA Frequently Asked Questions, question 31 (inclusive of private companies)*: 

Do businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?”

“In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application. Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification. Lenders may rely on a borrower’s certification regarding the necessity of the loan request. Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.”

* per SBA FAQ #31

Post-submission

When I applied for PPP, I received a loan application number through CashPro.  Does that indicate where I am in the SBA queue?
No. The loan application number from CashPro confirms only that Bank of America received your application. 

Loan forgiveness

When can I apply for loan forgiveness?
We will begin opening our online loan forgiveness application in early August and will be emailing you with additional instructions on how and when to apply. You can also expect your Bank Representative to be in touch with you to help you through this process.

How long do I have to apply for loan forgiveness? 
The timeframe for applying for loan forgiveness in your promissory note no longer applies. You now have more time to gather your documents and prepare your application. 

Based on the latest guidance from the SBA, you may submit a loan forgiveness application any time on or before the maturity date of your loan. We will notify you by email of any changes to your loan forgiveness application window.

Which PPP loan forgiveness application should I use?
In an effort to make it easier for some businesses to apply for PPP loan forgiveness, the SBA published a new PPP EZ Loan Forgiveness Application Form 3508EZ for borrowers that meet certain requirements. To determine if you are able to use the EZ application, you should review the Checklist for Using SBA Form 3508EZ on the SBA’s website. 

Borrowers that do not meet the requirements for using Form 3508EZ will apply using the updated PPP Loan Forgiveness Application Form 3508.

How can I prepare to apply for loan forgiveness?
Once you determine which SBA Loan Forgiveness Application Form you will use, we recommend that, prior to applying online through Bank of America for PPP loan forgiveness, you carefully review and fill out the applicable form, and gather the required documentation specified in the instructions: 

Where should I go if I have questions?
For detailed information on the application, covered periods, the types of costs that are eligible for forgiveness, and what documentation you will need to submit in connection with your application, please visit the SBA website

For questions related to PPP, please contact your Bank Representative. 

Bank of America is committed to supporting you and all of our clients during this challenging period. 

Important Note: The Small Business Administration and the Department of Treasury continue to provide additional guidance concerning the Paycheck Protection Program. Thus, Bank of America makes no representation that information contained herein is up-to-date or complete. Before submitting a request for loan forgiveness, borrowers may wish to visit the SBA, U.S. Treasury Assistance for Small Businesses, and U.S. Treasury FAQ websites for the latest information and guidance related to the Paycheck Protection Program. 

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