Congratulations on closing your PPP Loan! By now, you may be wondering what the forgiveness process and requirements will be for your loan. Leader Bank is committed to keeping you as up to date as possible as we receive information from the SBA. We have created this PPP Forgiveness Resource page for our customers, which will be consistently updated with information regarding SBA forgiveness as well as providing the SBA’s PPP Forgiveness Applications (Forms 3508 and 3508EZ) that our PPP Borrowers can complete as part of the process.
Sushil Tuli, CEO, Leader Bank, NA
Last updated 06/18/2020
Leader Bank understands that borrowers under the SBA’s Paycheck Protection Program are very interested in information regarding the potential forgiveness of their loan balance. We are closely monitoring announcements and rules from the SBA to ensure that we can provide our customers with as much information as possible.
With the recent passage of the Paycheck Protection Program Flexibility Act (the “Act”), PPP borrowers now have significantly more flexibility in seeking forgiveness. This includes extending the time period for spending PPP funds, reducing the percentage of forgiveness that must be spent on payroll costs, and other key reforms. Treasury and the SBA have issued updated forms and instructions for forgiveness based on the Act, but additional changes may be forthcoming. The guidance provided on this website is accurate as of the “Last Updated” date above, and we recommend you visit this page regularly for updates and we look forward to giving you more up-to-date information as soon as it is available. If you have any further questions, please reach out to your Leader Bank small business loan officer directly.
More PPP Resources
Any of our SBA professionals would love to speak with you about your lending needs. Call or email today - we are happy to answer your questions whether you need a loan from us right now or are just looking for advice for the future.
A PPP borrower may seek forgiveness on their loan if they use the proceeds on authorized expenses, including payroll costs, interest on mortgages obtained prior to February 15, 2020, rent for leases in effect before February 15, 2020, and payment on utilities where service began on or before February 15, 2020. Payroll costs can include certain ancillary items such as health care expenses, sick leave and vacation time, but do NOT include health care expenses paid by employees or employment taxes. In addition:
In addition to the restrictions above, the SBA may further reduce your forgiveness amount under the following circumstances:
Once your Forgiveness Period is over, you may submit a request to your PPP lender for your loan to be forgiven in whole or in part. You must submit documentation only to the lender from whom you obtained your PPP loan – it should not be submitted to the SBA directly or any other financial institution. In order to be eligible for forgiveness, you must submit a complete forgiveness application no later than ten months following the end of your Forgiveness Period. If you fail to submit a complete application by that time, you will be required to repay your PPP loan pursuant to the terms of your promissory note.
The Instructions for each of the application forms above contained detailed information regarding what documents you will need to submit for forgiveness, and we strongly recommend you review those instructions carefully. Leader Bank is currently in the process of creating a portal for our PPP customers where they can submit their forgiveness request and documentation, which will include at minimum the following documents:
An EIDL Loan May Not Be Refinanced with a PPP Loan When:
An EIDL Loan is Not Required to Be Refinanced with a PPP Loan When:
A PPP Loan Must Be Used to Refinance the Full Amount of the EIDL Loan When:
The amount of the EIDL loan to be refinanced does not include the amount of any EIDL “advance” (also referred to as an EIDL “grant”) received by the PPP Borrower, because the EIDL advance does not need to be repaid.