Taylor Bank is proud to have been the first bank in Maryland to fund a PPP loan. From April 10, 2020 through August 8, 2020 the bank assisted 546 local businesses obtain $33,214,244 in total PPP loans to protect the paychecks of 5,354 employees throughout Worcester County, MD; Sussex County, DE; and Accomack County, VA.
On October 7th, we received our first notification from SBA providing full forgiveness for one of our Borrowers.
We are currently only accepting Forgiveness applications for PPP loans that were dispersed during the 1st round (in 2020). We are currently awaiting guidance from the SBA regarding the forgiveness process of all PPP loans issued during the 2nd round (in 2021).
Please review the information below, to determine which forgiveness application is right for you.
Repeal of the EIDL Advance Deduction
According to a review of the text of the Consolidated Appropriations Act; advances received from an EIDL (Economic Injury Disaster Loan) will no longer reduce the amount eligible for forgiveness on a loan obtained under the Paycheck Protection Program.
Forgiveness Applications submitted after December 29th, will not be subject to the EIDL deduction.
Our Recommendation at this time:
If you have received an EIDL Advance and:
Have not submitted the Forgiveness Application:
If your PPP loan amount was greater than $150,000, submit your Forgiveness application at your convenience.
If your PPP loan amount was less than $50,000, submit your Forgiveness application at your convenience.
If your PPP Loan amount was greater than $50,000 but less than $150,000, you may want to wait for the streamlined application.
We will notify you when we have additional information.
Have submitted the Forgiveness Application:
The SBA knows the borrowers that had the EIDL advance amount deducted from their forgiveness amount. The SBA will remit to the Bank, the EIDL advance amount plus interest through the remittance date.
The Bank will notify you when the funds are received. We will payoff any remaining balance and remit the excess amount to you. Any remaining balance may be re-amortized.
Currently, there is not an expected date for these payments. Please continue to view our website for additional information. We encourage you to continue to make your required payment until this is received.
Please contact our PPP Forgiveness team at 410.641.1701 or email@example.com with additional questions.
SBA Releases Form 3508S - For PPP Loans $150,000 or Less
October 9, 2020 - The Small Business Administration released a streamlined loan forgiveness application for Paycheck Protection Program loans totaling $150,000 or less.
The two-page forgiveness application, Form 3508S, includes certifications from the borrower but does not require calculations to be submitted with the application.
Applicants must submit documentation verifying forgivable payroll and non-payroll expenses.
PPP loans of $150,000 or less are exempt from penalty due to a
- Reduction in their full-time equivalent (FTE) employees, and
- Reduction in employee salary and wages.
Paycheck Protection Loans greater than $150,000
The Small Business Administration has developed two Forgiveness Applications, SBA Form 3508 and the 3508EZ. Please review the Instructions to determine which application is right for you.
SBA Releases the EZ PPP Loan Forgiveness Application
EZ Application Eligibility
PPP borrowers must meet the following criteria:
- Self-Employed, Sole Proprietor, Independent Contractor AND have no employees; OR
- Did not reduce the salaries or wages of your employees by more than 25%, AND did not reduce the number or hours of their employees (except laid-off employees who refused an offer to return); OR
- Experienced reductions in business activity as a result of health directives related to COVID-19, AND did not reduce the salaries or wages of their employees by more than 25%.
To determine if you qualify for the EZ Application, refer to Page 1 of the Instructions. If you are able to check one of the boxes in the Checklist, you can use the EZ Application.
For those borrowers that are unable to qualify, you will need to complete the full Loan Forgiveness Application, which has also been revised.
Click below to review the EZ Application and full Loan Forgiveness Application. Refer to the Instructions to help determine which application is right for you.
PLEASE NOTE: There may be additional PPP Forgiveness Guidance in the upcoming weeks from the U.S. Treasury or U.S. Small Business Administration. Please watch for additional information from our PPP Forgiveness Team.
Paycheck Protection Program Flexibility Act
This Act, effective June 5, 2020, modifies and makes significant changes to the PPP Loan Program. We’ve summarized the key changes to the program, and the impact they may have on loan forgiveness.
It is important to note that the US Small Business Administration (SBA) and the US Department of the Treasury, at this time, have not provided any additional guidance to clarify the information contained in the Act.
Key Updates to the Program
The covered period for expenditure of loan proceeds on costs eligible for forgiveness has been extended from 8 weeks to 24 weeks, with a mandatory end date of December 31, 2020. If your loan was disbursed on or before July 16, 2020, you’ll get the benefit of the 24 weeks. However, any loans disbursed after July 16, 2020 will have a mandatory end date for the covered period of December 31, 2020. Overall, this should allow for more business owners to meet the requirements needed for full forgiveness.A business that has used their funds during the original 8-week period after disbursement; may apply for forgiveness at any time. Please note, however, that participating lenders have still not received guidance as to how the forgiveness application, supporting documents, and lender decision will be transmitted to the SBA.
To receive loan forgiveness, a business must use at least 60% of the covered loan amount for payroll costs, and may use up to 40% for other qualified expenses (i.e. utilities, mortgage interest, rent or lease). This requirement was originally 75% for payroll costs & 25% for other qualified expenses.
The safe harbor provision for re-hiring employees or reinstating pay cuts has been extended from June 30, 2020 to December 31, 2020. This will allow businesses more time to eliminate any reductions in the amount of full-time equivalent (FTE) employees or pay cuts to employees that had occurred between February 15, 2020 and April 26, 2020.
The forgiveness amount of PPP loans can be determined without regard to the proportional reduction in the number of FTEs if the business is able to document in good faith:
An inability to rehire individuals who were employees on February 15, 2020 or hire similar qualified individuals to fill the positions by December 31, 2020
An inability to return to the same level of business activity experienced before February 15, 2020, due to compliance with requirements or guidance related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19 (issued during the period beginning on March 1, 2020, and ending December 31,2020), and enforced by:
The Secretary of Health and Human Services (HHS)
The Director of the Centers for disease Control and Prevention (CDC)
The Occupational Safety and Health Administration (OSHA)
The minimum term of PPP loans originated after June 5, 2020 is 5 years. Borrowers who have existing PPP loans may request to have the minimum loan term extended from 2 years to 5 years and together with the Bank will come to a mutual agreement to modify the terms to conform to the Act. Please note, however, that participating lenders have still not received guidance as to how modifications to existing PPP loans will be documented.
Questions about your PPP Loan or the Forgiveness Process?
Our PPP Forgiveness Team is ready to help! You may email firstname.lastname@example.org or call (410) 641-1701 to speak to a PPP team member.