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PPP Loan Forgiveness

The Dime Bank's Loan Forgiveness Electronic Portal is now open.

Please read the information below. The Dime Bank’s PPP forgiveness team is available to assist you through this process. If you have questions, contact the following team members or your lender:

Linda Kelly - [email protected] - 570-253-1970 extension 7653

Rory McGhie - [email protected] - 570-253-1970 extension 7134

PPP Loan Forgiveness Landscape:

The legislative relief we were hoping for has yet to materialize. Efforts continue by banking and small business support groups to lobby for simplicity and clarity of many issues surrounding the PPP forgiveness process. Given this, the Treasury and Small Business Administration (“SBA”), in accordance with their authority under the CARES Act, deemed it within their scope to release a simplified forgiveness application for borrowers with a PPP loan of $50,000 or less (other than borrowers that together with affiliates received loans totaling $2 million or more). Loans above $50,000 are subject to either the 3508EZ or 3508 form.

Borrowers that use the new SBA Form 3508S are exempt from any reductions in the borrower’s loan forgiveness amount based on reduction in full-time employees or reduction in employee salary or wages, and do not need to make these calculations on the form. As we already know, the SBA Form 3508 and 3508EZ do not allow for these exemptions, though the 3508EZ form allows for a borrower to qualify for a safe harbor. For your conveniene, the links to the three available forms and their instructions are below:

We would like to restate, as a result of the PPP Flexibility Act (“the Act”), the deferral period for payment of interest has been extended. The Act replaced the initial six-month deferral period with deferral until the date the loan forgiveness amount is remitted by SBA to the lender. The Act also allows borrowers to remit forgiveness applications up to the maturity date of their loan. The Act further states that if a borrower does not apply for forgiveness, the earliest date for commencement of payments for principal, interest, and fees is 10 months after the last day of the covered period. The SBA has advised lenders that a formal modification of the promissory note is not required at this time, however, if a loan balance remains on the loan after the loan forgiveness process is completed, the loan documentation will be formally modified.

Below is an example with a 24-week Covered Period selected:

Loan Date: April 30, 2020
Covered Period selected: 24 Weeks
End of Covered Period: October 15, 2020
Interest Commencement Date (if borrower has not applied for forgiveness): August 11, 2021

Some PPP loan borrowers also received an advance/grant from the Economic Injury Disaster Loan program (“EIDL”).  The SBA recently stated that if a borrower received an EIDL advance/grant, the amount of the grant will be deducted from the borrower’s forgiveness calculation. If you received an EIDL advance, the SBA will make the deduction, therefore, when applying for PPP forgiveness, do not make an EIDL deduction and include the full amount of your PPP borrowing.  Please note that once again, industry groups are seeking a remedy to the confusion surrounding the EIDL advance program and the current rules may change regarding the deduction of the EIDL advance from your PPP borrowing.

The PPP forgiveness can be complicated and its effect on borrowers may differ. For guidance we recommend you consult your Accountant, CPA, or Tax Professional.

 

The Dime Bank’s Forgiveness Process and Electronic Portal:

The Dime Bank’s forgiveness process via Electronic Portal (the “Portal”) is now open to all borrowers.  

The access process commences with an initial email from [email protected] (this email is for your reference only, please do not use this email for questions) with the subject line “The Dime Bank has sent you a PPP Forgiveness Online Questionnaire”, sent to you between 11/15 and 11/16 to the email address we have on file for you. If you did not receive the initial email or if you would like us to grant access to the Portal to someone other than yourself (i.e., your Accountant, CPA, or Tax Professional), please contact Linda Kelly via email  at [email protected] or via phone at 570-253-1970 extension 7653.

In order to access the Portal, you will need the following information:

  • Recipient’s email address
  • Business EIN or individual’s SSN
  • SBA loan number (the SBA loan number is the loan number reflected in the loan documentation from The Dime Bank).   

The process is presented to you in questionnaire form. One of the earliest questions is the selection of which form you are choosing. Please remember that the 3508S form can only be chosen by borrowers with loan amounts of $50,000 or less.

When to file for PPP forgiveness is the decision of the borrower. If you are inclined to postpone filing, please flag or save the email from [email protected] (this email is for your reference only, please do not use this email for questions) so that you may retrieve it in the future. The link contained in the initial email should not expire. 

The questionnaire will be pre-populated with most of your loan information. Areas that need to be addressed and populated by the borrower are indicated with a red asterisk (*). As stated in the SBA instructions for each of the three forms, the borrower is required to provide documentation to support their forgiveness amounts/calculations. The questionnaire provides for and requires documentation to be uploaded prior to submission. The current rules require a borrower to submit documentation substantiating the calculations reflected in the Forgiveness Application to its lender.

The SBA shared the following list of required documentation:

Payroll Documentation:

  • For the selected Covered Period, bank account statements or 3rd party payroll service reports
  • 940/941 tax filings for the selected Covered Period
  • State & local employee wage reports
  • Health insurance & retirement paid
  • Account statements and receipts; or invoices and cancelled checks

Payroll Documentation for Sole Proprietors:

  • Bank account statement documenting the amount of cash compensation paid with proof of transfer of payment from business to self

Non-Payroll Documentation:

  • Mortgage Interest
    • Account statements
      • February 2020 and Covered Period and one month afterwards; or
      • Amortization schedule and receipts/cancelled checks
  • Rent/Lease
    • Account statements
      • February 2020 and Covered Period and one month afterwards; or
      • Lease agreement and receipts/cancelled checks
  • Utilities
    • Account statements
      • Invoices February 2020 and Covered Period
      • Receipts/Cancelled Checks/Account Statements

Please note that when utilizing form 3508S, payroll documentation is required, and if a 24-week covered period is selected, the borrowing is most likely entirely substantiated by payroll expense. Although, non-payroll costs may not be a factor in the forgiveness amount, documentation verifying the existence of non-payroll obligations/services prior to 2/15/2020 is required to be submitted. Existence of non-payroll expenses for this time period would be substantiated by uploading a copy of one of the following documents dated on or before 2/15/2020: 

  • Utility bill
  • Insurance bill
  • Lease or mortgage interest statement

If you prefer to file your forgiveness application via a non-electronic process, we ask that you please contact Linda Kelly via email at [email protected] or via phone at 570-253-1970 extension 7653 to make other accommodations. 

Thank you for applying and receiving your Paycheck Protection Program (PPP) funds through The Dime Bank.

The Dime Bank’s PPP forgiveness team is available to assist you through this process. Please contact the following team members or your lender with any questions:

Linda Kelly - [email protected] - 570-253-1970 extension 7653

Rory McGhie - [email protected] - 570-253-1970 extension 7134

 

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