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PPP Loan Forgiveness Platform is Here!

We are pleased to notify you that our PPP Loan Forgiveness platform is now available to customers with a PPP loan equal to or less than $150,000.

What does this mean?

As a customer with a PPP loan equal to or less than $150,000, you may now request access to Midwest BankCentre’s PPP Forgiveness Platform to complete and submit the PPP Loan Forgiveness Application. As part of the application process, the platform has the capability to easily upload supporting documentation.

 
To allow us to better serve our valued customers, please request access to the platform only when you are fully ready to complete and submit your forgiveness application and supporting documentation.
 
 
 
 

Once you have gathered supporting documentation and are ready to complete and submit your application, you may request access to the platform by emailing pppportalaccessrequest@midwestbankcentre.com.

Please include the following information in your request:

  • Business name (or individual name if sole proprietor/independent contractor)
  • Loan number (if known)
  • Primary contact
  • Primary contact email address

Note: The primary contact is not necessarily always the borrower contact. For example, if the Controller of an organization will be completing the forgiveness application, their contact name and email address should be provided.

An email with platform login instructions and how to begin the forgiveness process will be sent from ppploanforgivenessadmin@midwestbankcentre.com to the primary contact email address noted in the customer request. It may take up to 5 business days to obtain the platform login information from the date of your initial access request.

What documents are required as part of the application?

Each borrower’s PPP forgiveness application will vary based on eligible expenses claimed. See the resources listed below as well as the listing of required documents in the Documents section of the platform once you have access.

 

PPP Loan Forgiveness Guidance from SBA: 
 
 

The Small Business Administration (SBA) has issued guidance allowing borrowers to claim forgiveness of their Paycheck Protection Program (PPP) loans.  The SBA’s Loan Forgiveness Application provides detailed instructions for borrowers and the calculation of the PPP loan forgiveness.  

Current guidance can be found HERE. This guidance is subject to change based on future SBA guidance. 
 

On October 8, 2020, the SBA announced changes to the Paycheck Protection Program (PPP) loan forgiveness process.  Under current guidance, borrowers may now request the forgiveness of PPP loan proceeds by filing a SBA Form 3508S, 3508EZ, or 3508 application. The table below provides a high level overview and eligibility requirements for each of the applications:

 

SBA Form

Eligibility

Overview

Links

3508S

PPP borrowers with a loan of $50,000 or less (unless, together with your affiliates, your PPP loans total $2 million or more) regardless of the business type (self-employed, independent contractor, LLC, etc.)

Simplified forgiveness application process that requires fewer calculations and less documentation for borrowers; however, this is not automatic forgiveness.  Supporting documentation is still required to be submitted with the application.

Borrowers that use SBA Form 3508S are exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wage

Form 3508S Application

 

Form 3508S Instructions

3508EZ

PPP borrower with a loan greater than $50,000 and the following apply:

-   Self-employed, independent contractor, sole proprietors, or

 

-   Borrowers who did not reduce employee salary/wages by more than 25% or the number of employees during the relevant covered period.

 

Refer to Form 3508EZ Instructions for further eligibility requirements.

Simplified forgiveness application process as it requires less documentation, compared to Form 3508, for eligible borrowers.

Form 3508EZ Application

 

Form 3508EZ Instructions

3508

All PPP borrowers who do not qualify to use forms 3508EZ or 3508S.

Most comprehensive application with more documentation requirements. 

Form 3508 Application

 

Form 3508 Instructions

 

Forgiveness Application Due Date:

Borrowers have ten (10) months after the expiration of the borrower’s chosen “covered period” to submit their forgiveness application to MBC.

For example:  If the loan is originated on April 1, 2020, then the “Covered Period” is 24 weeks (which ends on September 16, 2020), unless the borrower chooses an 8 week Covered Period (in which case the Covered Period ends on May 27, 2020).   The borrower then has 10 months from the end of the Covered Period to submit its forgiveness application (July 16, 2021 for a 24 week Covered Period, or March 27, 2021 for an 8 week Covered Period).

 

PPP Loan Payment Update:

When PPP loans were first made by the bank, applicable law required that payments be deferred for the first 6 months. 

For example:  If the loan was originated on April 1, 2020, principal and interest payments began on November 1, 2020.

The payment deferral period was recently extended under the PPP Flexibility Act and applicable guidance to the earlier of the following:

  • If the borrower submits its forgiveness application to the lender within the required deadline (i.e. 10 months after the expiration of the borrower’s “Covered Period”), then payments are deferred until the first due date after the SBA remits to lender the forgiveness amount. 

For example: Assuming the borrower selects the 24 week Covered Period for a loan originated on April 1, 2020, if the borrower submits its forgiveness application by July 16, 2021 (from the Forgiveness Application example), then the borrower is not required to make a payment until such time that the SBA remits to lender the forgiveness amount.  Since the lender is given 2 months to process the forgiveness application and the SBA is given 3 months to remit the forgiveness amount to lender, the borrower’s first payment could be deferred up to December 16, 2021.

 
  • If the borrower fails to submit its forgiveness application within the required deadline, then the first payment is due on the first due date after the expiration of the forgiveness application deadline. 
For example:  Using the above example, if the borrower fails to submit its forgiveness application by July 16, 2021, then it must start making payments on the next due date after July 16, 2021.  Assuming payments were due on the 1st of each month, borrower would begin making payments on August 1, 2021.
 

More Details found HERE.  This guidance is subject to change based on future SBA guidance.

 

Want to learn more?

The entire Midwest BankCentre team, including our Small Business Administration specialist, is ready to provide game-changing assistance for small business owners.

Please call us at (314) 631-5500, or (800) 894-1350 if you have any questions. 

When we DREAM BIG, we all RISE TOGETHER.

 

* According to the PPP Loan Forgiveness Application Form 3508EZ instructions, a borrower may use the streamlined form if it meets one of three criteria: (i) the borrower is self-employed, an independent contractor, or sole proprietor with no employees at the time of application; (ii) the borrower did not reduce salary or wages of any employee by more than 25 percent during the covered period and did not reduce the number of employees or the average paid hours of employees; or (iii) did not reduce salary or wages of any employee by more than 25 percent during the covered period and was unable to operate during the covered period at the same business activity level as prior to February 15, 2020, due to compliance with certain government requirements.

How large can my loan be? 

Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount, up to $10 million.

If you are a seasonal or new business, you will use different applicable time periods for your calculation.


Who’s Eligible for the Loan?

All Businesses – including nonprofits, veterans organizations,  Self Employed, Sole Proprietorships and Independent Contractors - with less than 500 employees are eligible for the loan.  This includes full-time and part-time employees, with special waivers for groups in the accommodation and food services industry and franchises.


How can I apply?

Your application will NOT be considered complete and will NOT be processed with missing documentation.

1.) Download and fill out the borrower application form (SBA Form 2483 (04/20). Click here.

2.) Gather the appropriate supporting documentation.  See documentation checklist. Click here.

3.) Determine the Maximum Loan amount by downloading and completing the Max. Loan Amount Calculator. Click here. 

4.) Submit Your Application.

We are processing loan applications for clients on a first come first serve basis. It is imperative that all information be accurate and complete upon submission.  Your application will not be considered complete and cannot be processed with missing documentation. Incomplete applications will go to the end of the queue once all required documentation has been provided.


What other documents will I need to include in my application?

Please see the documentation check list HERE.


How long will this program last?

Although the program is open until August 8th, 2020, we encourage you to apply as quickly as you can because there is a funding cap and lenders need time to process your loan.

What Expenses Are Eligible and considered part of the Monthly Operating Costs?

  • Payroll costs, including benefits;
  • Interest on mortgage obligations, incurred before February 15, 2020;
  • Rent, under lease agreements in force before February 15, 2020; and
  • Utilities, for which service began before February 15, 2020.

What’s Included in Payroll Costs?  What’s Excluded? 

Included:

  • Employee Salary, wages, benefits and commissions, including tips
  • Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
  • State and local taxes assessed on compensation; and

Excluded:

  • Payroll costs exclude compensation of an individual person in excess of $100,000, compensation to those whose principal residence is outside the US, and certain qualified sick and family leaves.

What are the Key Stipulations for Loan Forgiveness?

The loan amounts will be forgiven as long as:

  • The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and
  • Employee and compensation levels are maintained.

*It is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.


For Loan Forgiveness, how are employee and compensation levels defined?

              In order to be eligible for loan forgiveness, employee and compensation levels must be maintained.

  • Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount.
  • Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
  • Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.

Subject to ongoing guidance from the SBA

 

What are the Loan Terms?

All loan terms will be the same for everyone.


What is my interest rate?

1% fixed rate.


When do I need to start paying interest on my loan?

All payments are deferred for 6 months; however, interest will continue to accrue over this period.


When is my loan due?

In 2 years.


Can I pay my loan earlier than 2 years?

Yes. There are no prepayment penalties or fees.


Do I need to pledge any collateral for these loans?

No. No collateral is required.


Do I need to personally guarantee this loan?

No. There is no personal guarantee requirement.