Important Update — Legislation signed into law on July 4 authorized the Small Business Administration (SBA) to approve Paycheck Protection Program (PPP) loan applications through the earlier of August 8, 2020 or until funds run out. This was an extension from the SBA’s original deadline of June 30, 2020.
In accordance with the SBA’s updated August 8 deadline:
•If you applied for a PPP loan, but did not receive a SBA loan number by the time of the SBA’s August 8 cutoff, you will be notified that your application will not be processed and has been cancelled.
•Signed promissory notes should be submitted to Bank of America as soon as possible. Failing to do so promptly could impact your ability to receive funds under the PPP.
We are monitoring proposals in the U.S. government related to a potential extension of the PPP.
For clients who received a PPP loan from the SBA through Bank of America, we look forward to supporting you as you begin the loan forgiveness phase of the program. We are working to deliver the best possible experience for you during this important time and plan to begin opening our PPP loan forgiveness application portal to clients in August. We will email you with specific instructions on how and when you can apply.
For up-to-date rules for the SBA’s PPP loan forgiveness process, including your covered period, the types of costs that are eligible for forgiveness and what documentation you will need to submit as part of your application, please visit the SBA website.
Frequently Asked Questions
What is the Paycheck Protection Program (PPP)?
The Paycheck Protection Program is a federal relief program established by Congress and implemented by the U.S. Treasury Department and the Small Business Administration (SBA) with rules, requirements, protocols and processes that all participating banks, including Bank of America, must follow. For more information on the Paycheck Protection Program, please visit the U.S. Treasury and SBA websites.
Will Bank of America pay fees to third-party agents who have assisted clients with the preparation of PPP loan applications?
In the absence of a pre-loan approval written agreement between the agent and Bank of America, Bank of America does not pay fees or other compensation to agents who represent or assist borrowers through the Paycheck Protection Program.
Does Bank of America disclose the names of PPP recipients? Was my name disclosed by the SBA – or will it be in the future?
Bank of America does not publicly disclose the names of clients who receive PPP loans. However, in June, the Small Business Administration (SBA), in consultation with the Treasury Department, announced that it would release data regarding the loans made under the Paycheck Protection Program (PPP). On July 6, the SBA released information on 4.9 million PPP loans, including loans provided through Bank of America. The disclosure includes loan-level data, including business names, addresses, NAICS codes, zip codes, business type, demographic data, non-profit information, name of lender, jobs supported, and loan amount ranges as follows: $150,000-350,000, $350,000-1 million, $1-2 million, $2-5 million, $5-10 million. For loans below $150,000, SBA released all of the above information except for business names and addresses. For more information, please visit the SBA website.
What changes has the SBA made to the PPP rules and how do they impact the loan forgiveness process?
The Paycheck Protection Program Flexibility Act, signed into law on June 5, 2020 contained the following changes:
•You now have a 24-week “covered period,” the period in which you must spend the PPP loan proceeds for full loan forgiveness, starting on the date the funds were disbursed. If your PPP loan was funded prior to June 5, 2020, you still have the option to use the original 8-week covered period.
•You must use at least 60% of funds for eligible payroll costs to qualify for full loan forgiveness, down from 75%.
•You can use up to 40% of funds for eligible non-payroll costs, up from 25%.
You can find up-to-date information on the rules of the program on the SBA website.
Will there be additional changes to the PPP loan forgiveness process?
You may have seen press reports and other references to proposals in the U.S. government to simplify the forgiveness application process; for instance, for borrowers who received PPP loans of $150,000 or less. While it is not known if or how those proposals or potential changes might proceed, we understand these reports may influence decisions on when to apply. Please visit the SBA website or the U.S. Treasury Assistance for Small Businesses website for the most accurate updates on U.S. government policies about the PPP.
When can I apply for loan forgiveness?
We are working to deliver the best possible experience for you during this important time and plan to begin opening our PPP loan forgiveness application portal to clients in August. We will email you with specific instructions on how and when you can apply.
As a reminder, based on the latest updates from the SBA, you now have more time to gather your documents and prepare your application. The timeframe for applying for loan forgiveness in the promissory note no longer applies.
You can also expect your Bank Representative to be in touch with you to help you through this process.
How long do I have to apply for loan forgiveness?
The timeframe for applying for loan forgiveness in your promissory note no longer applies. You now have more time to gather your documents and prepare your application.
Based on the latest guidance from the SBA, you may submit a loan forgiveness application any time on or before the maturity date of your loan. We will notify you by email of any changes to your loan forgiveness application window.
Which PPP loan forgiveness application should I use?
In an effort to make it easier for some businesses to apply for PPP loan forgiveness, the SBA published a new PPP EZ Loan Forgiveness Application Form 3508EZ for borrowers that meet certain requirements. To determine if you are able to use the EZ application, you should review the Checklist for Using SBA Form 3508EZ on the SBA’s website.
Borrowers that do not meet the requirements for using Form 3508EZ will apply using the updated PPP Loan Forgiveness Application Form 3508.
How can I prepare to apply for loan forgiveness?
Once you determine which SBA Loan Forgiveness Application Form you will use, we recommend that, prior to applying online through Bank of America for PPP loan forgiveness, you carefully review and fill out the applicable form, and gather the required documentation specified in the instructions:
Who determines the amount of loan forgiveness?
The U.S. Treasury and Small Business Administration (SBA) are responsible for the rules of the program, which determine the amount of loan forgiveness you may receive. This can include full, partial or no forgiveness.
How is the amount of owner compensation that is eligible for loan forgiveness determined? What if I am an owner of multiple businesses with multiple PPP loans?
As of August 4, 2020, in Frequently Asked Questions (FAQs) on PPP Loan Forgiveness, the SBA stated (emphasis added):
The amount of compensation of owners who work at their business that is eligible for forgiveness depends on the business type and whether the borrower is using an eight-week or 24-week Covered Period. In addition to the specific caps described below, the amount of loan forgiveness requested for owner-employees and self-employed individuals’ payroll compensation is capped at $20,833 per individual in total across all businesses in which he or she has an ownership stake. For borrowers that received a PPP loan before June 5, 2020 and elect to use an eight-week Covered Period, this cap is $15,385. If their total compensation across businesses that receive a PPP loan exceeds the cap, owners can choose how to allocate the capped amount across different businesses.
Is interest on unsecured credit eligible for loan forgiveness?
As of August 4, 2020, in Frequently Asked Questions (FAQs) on PPP Loan Forgiveness, the SBA stated:
No. Payments of interest on business mortgages on real or personal property (such as an auto loan) are eligible for loan forgiveness. Interest on unsecured credit is not eligible for loan forgiveness because the loan is not secured by real or personal property. Although interest on unsecured credit incurred before February 15, 2020 is a permissible use of PPP loan proceeds, this expense is not eligible for forgiveness.
What utility payments are eligible for forgiveness?
Business payments for a service for the distribution of electricity, gas, water, transportation, telephone or internet access for which service began before February 15, 2020.
Where should I go if I have questions?
For detailed information on the application, covered periods, the types of costs that are eligible for forgiveness, and what documentation you will need to submit in connection with your application, please visit the U.S. Treasury and SBA websites.
For questions related to PPP, please contact your Bank Representative.
Bank of America is committed to supporting you and all of our clients during this challenging period.
Important Note: The Small Business Administration and the Department of Treasury continue to provide additional guidance concerning the Paycheck Protection Program. Thus, Bank of America makes no representation that information contained herein is up-to-date or complete. Before submitting a request for loan forgiveness, borrowers may wish to visit the SBA, U.S. Treasury Assistance for Small Businesses, and U.S. Treasury FAQ websites for the latest information and guidance related to the Paycheck Protection Program.
Information as of 08/14/20.