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Assistance for Small Businesses

posted on Wednesday, April 1, 2020

Update as of 8-5-20

PPP PARTICIPANTS: We are ready to receive your PPP Loan Forgiveness Applications, if you have completed your 8 or 24 week period. CUSB Bank can start submitting applications to SBA, STARTING AUGUST 10.  Please submit your applications and support documentation to your loan officer for processing as you are ready to do so. 

SBA has released more information to help clarify the forgiveness process. This material gives further detail for how to submit forgiveness applications. A number of questions have been answered in more detail including:
  • Which loan forgiveness application should sole proprietors, independent contractors, or self-employed individuals with no employees complete?
  • Are payroll costs that were incurred before the Covered Period but paid during the Covered period eligible for loan forgiveness?
  • For purposes of calculating cash compensation, should borrowers use the gross amount before deductions for taxes, employee benefits payments, and similar payments, or the net amount paid to employees?

For answers to these questions and more, go to these Frequently Asked Questions.

Update as of 6-25-20

The SBA has released revised Loan Forgiveness Applications and rules to implement the legislative changes made to the Paycheck Protection Program (PPP) via the Paycheck Protection Flexibility Act of 2020.
 
This legislation expanded the “covered period” from 8 to 24 weeks, reduced from 75% to 60% the amount a business must devote to payroll costs to achieve complete loan forgiveness, extended the maturity for any unforgiven loan amount from 2 years to 5 years, and extended the “safe harbor” hiring deadline from June 30, 2020 to December 31, 2020.  The new forgiveness applications and rules incorporate these changes, and the links are below for your review and use.  Please note that these revisions are applicable to all SBA guaranty numbers issued on, or after, June 5, 2020, and the changes may be applicable to those issued prior to June 5, 2020.
 
The simplified three-page “EZ” loan forgiveness application requires less documentation and fewer calculations than previously required.  Form 3508EZ applies to borrowers who meet any of these three criteria:
  • Applied for the PPP loan as self-employed, an independent contractor or a sole proprietor with no employees, or
  • 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), or
  • 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.
As a general rule, if you have no employees, you are eligible to use the “EZ” form to request forgiveness of your owner compensation replacement and other eligible costs, as applicable.

If you have employees, it is important to know that regardless of what application form you think you are eligible to use you will need to follow the same process to determine whether or not 1) you had a reduction in full-time equivalent employees (FTEs), or 2) you reduced the pay of any employee by more than 25%.  Making these determinations will require that you gather payroll documentation and perform the same requisite calculations.  In other words, the initial process for both application forms is the same.  The difference, then, is that if you had reductions in FTEs or pay rates that exceed the allowable amount you will need to complete the full application form to calculate your forgiveness reduction.  If you did not have FTE or pay rate reductions exceeding the allowable amount you can use the simpler “EZ” form.  In either case, though, the SBA requires that documentation either accompanies your forgiveness application or is retained by the borrower/applicant for six years following the date of forgiveness.

Loan Forgiveness Application Form EZ Instructions
Loan Forgiveness Application Form EZ
Loan Forgiveness Application Instructions
Loan Forgiveness Application

While the applications and rules have been released we ask PPP borrowers to be patient and not submit forgiveness applications until further clarifications and guidance are issued.  At this point the bank has not been issued guidance as to how to process a Loan Forgiveness Application.  We’ll keep you informed as new rules and guidance are rolled out.

Please consult your CUSB Bank Lender for further questions. 
April Information:

CUSB Bank knows that COVID-19 has challenged Small Business Owners and we want to let you know all of the ways that we can help.

First, please consult your CUSB Bank Lender about your current loan. We can extend your current loan payment for 90 days. See us for the details.

Second please check out the new legislation. On Friday, March 27, the President signed into law the CARES Act. The law contains two programs that may be of assistance:

-Paycheck Protection Program or PPP: Details can be found here

-Emergency Loans or Economic Injury Disaster Loan (EIDL): Details can be found here

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