*This link will take you to a 3rd party site that Community First Bank of Indiana has contracted to securely input your application.While the bank does not control this site, it is an approved vendor of the bank.
It’s time, once again, for a PPP update. This time, there have been some positive changes to report. As you may have heard, the SBA has approved, for loans under $50,000, a further streamlined application (Form 3508S). As of yesterday, Monday, October 19, you can find that application on our website. SBA has also released an updated FAQ, which can be accessed through the following link:https://www.cfbindiana.com/wp-content/uploads/2020/10/Final-PPP-FAQs-October-7-2020.pdf
Loans between $50,000 and $2,000,000 may still qualify to use the EZ form, which still provides significant time savings.
In addition to some other changes, this FAQ addresses the timeframe for filing a loan forgiveness application. In short, loan payments may be deferred for up to 10 months after the 8 or 24 week covered period.
I would like to provide you with a few numbers from our PPP portfolio. In total, we have provided 641 PPP loans since the program began. Total dollar volume exceeded $45 million. Of those 641 loans, 122 have applied for loan forgiveness. 30 loans have received full forgiveness from the SBA, with 83 loans submitted and pending SBA approval. 6 of the forgiveness applications we have received are either in process or awaiting additional information. The majority of the loans that have been approved have been smaller in size. The SBA does not appear to be processing loans in chronological order of submission. Some larger loans were submitted over 60 days ago, so it appears that the SBA may be doing a more thorough review on larger dollar amounts.
We have received a few phone calls and emails regarding tax consequences related to PPP forgiveness and the use of PPP funds. If you have concerns regarding the tax implications of loan forgiveness, we suggest you consult with your tax advisor or CPA.
The possibility of a third round of PPP loans remains. However, it appears as though a further PPP funding will be tied to passage of another stimulus package. Given the current political environment, chances of passing such a bill prior to the elections seem to be dimming. If additional stimulus is passed that includes PPP availability, we will do our best to notify you through email and posting on our website.
Once again, thank you for choosing CFB as your PPP lender.
We appreciate the opportunity to be of service.
CEO & President
Community First Bank of Indiana
The purpose of this update is to notify you of important changes to the deferral period described in the promissory note (the “Note”) that you executed in connection with the Paycheck Protection Program (the “PPP”) loan you received from the Bank. These changes result from amendments to the CARES Act that were adopted subsequent to the origination of your PPP loan and are automatically applicable to your loan. No additional action is required from you at this time regarding these changes.
As a result of the amendments to the CARES Act, the deferral period under the Note has been extended until the earlier of (a) or (b) below:
(a) if you submit an application for forgiveness of your PPP loan within 10 months after the end of the “loan forgiveness covered period” (as defined below), your deferral period is extended until the date on which the Small Business Administration (the “SBA”) (i) remits the loan forgiveness amount on your PPP loan to the Bank, or (ii) notifies the Bank that no loan forgiveness is allowed on your PPP loan; or
(b) if you do not submit an application for forgiveness of your PPP loan within 10 months after the end of the loan forgiveness covered period, your deferral period is extended until the date that is 10 months after the last day of your loan forgiveness covered period.
The “loan forgiveness covered period” covers the period beginning on the date your PPP loan was originated (the “Origination Date”) and ends on the earlier of (a) the date that is 24 weeks after the Origination Date, or (b) December 31, 2020, unless you have otherwise made an election to use the original 8-week period.
We will notify you when the SBA remits the loan forgiveness amount for your loan to the Bank. If you do not submit an application for loan forgiveness by the applicable deadline, or the SBA notifies us that some or all of you loan is not eligible for forgiveness, we will notify you of the date on which your first payment is due.
If you have any questions about the change to the deferral period for your PPP loan, please contact your loan officer. If you have any legal, tax or accounting questions regarding when or how to apply for forgiveness of your PPP loan, we encourage you to contact your attorney, tax advisor, or accountant as we cannot provide legal, tax or accounting advice to you.
Hello to all and happy Friday! Once again, I am sending an update on the PPP loan forgiveness landscape without much substantive change to report. While there continues to be discussion regarding additional streamlining of the forgiveness process, there have been no approved changes to the existing program. With the distraction of the upcoming election and the focus on additional stimulus funding, it appears that the chances of additional streamlining may be waning. Treasury Secretary Mnuchin has stated his support of such changes, but he has also acknowledged that it would likely take additional legislative action to bring it about. He has also stated that he would not advise delaying forgiveness application in hopes of further streamlining. Based on those comments and the lack of legislative progress, we are suggesting those borrowers who have spent their PPP funds on eligible expenses and have gathered the necessary supporting documentation consider submitting their applications for loan forgiveness. This can be done through our website www.cfbindiana.com/paycheck-protection-program/.
You will need your loan amount and tax identification number of the borrower to start the process. So far, the vast majority of borrowers submitting their forgiveness application have qualified to use the EZ application. This streamlined application should save a considerable amount of time from the original, full-length application. For those that may not qualify for the EZ application, I would suggest starting early, as the full-length application may take considerably longer.
There has also been talk of a potential 3rd round of PPP loans, available for new borrowers and for those who accessed the program in the first two rounds. Should this 3rd round come to fruition, CFB will again be participating and ready to process your request. We will keep you updated with any further developments regarding another round of funding.
One of the most common concerns we have heard is that PPP loan payments are scheduled to begin soon. This is NOT the case. Changes were made to the program extending the deferral period for up to 10 months after the “Covered Period” during which funds were spent or after application for forgiveness was submitted. Loan due dates have been modified in CFB’s system so that you will not be billed for payments until the expiration of the modified deferral period.
Due to the number of changes made during the PPP program, it is nearly impossible to address all of the scenarios in an update letter. Additional information can be found at www.sba.gov/ppp. Questions directed to our dedicated email firstname.lastname@example.org will be answered as quickly as possible.
Once again, we thank you for choosing Community First Bank of Indiana to assist with your PPP loan. We hope the experience has been satisfactory. We especially thank those of you who have banked with us in the past and welcome those who have recently moved your banking relationships to us. We hope to have the opportunity to be of service to all of you in the future.
Best wishes for a great weekend to all!
Direct Dial: (765) 456-4312
Happy Friday! It’s been at least a couple of weeks since our last update. So, I thought I would let everyone know that there has not been much new to report. While we continue to hear about legislative support for further streamlining of the PPP loan forgiveness process, there has been no vote or other definitive movement on the issue. As we near the end of August and loan forgiveness continues to be tied to other legislative issues, the likelihood of a “fast fix” appears to be decreasing. At this point, it does not appear that any further streamlining is likely for loans over $150,000. I think there is still a possibility of some additional relief for those loans under $150,000, but it will likely be tied to an additional stimulus package and I wouldn’t venture to guess when or if that may be passed.
Based on the above information, we are encouraging borrowers with loan amounts above $150,000 who have spent the PPP funds on payroll to compile the necessary supporting documents and to consider submitting the loan forgiveness application now. We would also suggest consulting with a tax advisor or accountant to discuss the best timing for your individual circumstance. Over the few weeks, we have submitted 16 loan forgiveness applications through the SBA portal and have not yet received an approval. The SBA can take up to 90 days to give final approval.
Earlier this week the SBA released an interim final rule addressing certain technical issues related to business owners and certain non-payroll costs. The rule revised PPP’s owner-employee compensation rule addressing the amount eligible for forgiveness to exempt employees who own less than 5% of a C-corp or S-corp borrower, determining that owner-employees at this threshold cannot meaningfully influence decisions about the use of PPP loan proceeds.
For non-payroll costs, SBA clarified that monies attributable to tenants or sub-tenants of a PPP borrower, or for home-based businesses, household expenses do not qualify for forgiveness. Examples are provided within the rule. Rent payments to a related third party are eligible under certain conditions outlined in the rule.
Read the Interim Final Rule here.
That’s all for now. Best wishes for a happy and healthy weekend.
Happy Friday my PPP friends! We have now reached the end of the PPP loan application period and are a short time into the loan forgiveness process. We have received a few applications for loan forgiveness and will begin processing those through the SBA next week. For borrowers with loans of $150,000 or less, we are encouraging you to wait to see if Congress passes pending legislation that would allow for automatic forgiveness upon submission of a one-page attestation. We expect a resolution on that issue by the end of August. We will continue to update you as new information becomes available.
I am also providing a link HERE to the SBA’s most recently released FAQ regarding loan forgiveness. I hope you find it helpful.
Thank you, once again, for choosing CFB for your PPP loan. We appreciate the opportunity to be of service.
Have a wonderful weekend!
Hello again, my PPP friends! I mentioned in yesterday’s webinar that, because there have been no recent, substantive changes in loan forgiveness guidance, I did not expect to send out an update today. However, this morning I received a piece from the American Bankers Association that included the following excerpt:
ABA joined a broad coalition of nearly 150 trade associations and advocacy groups in strong support of a bipartisan bill that would expedite the forgiveness process for most borrowers who received loans through the Small Business Administration’s Paycheck Protection Program. Sponsored by Sens. Kevin Cramer (R-N.D.), Bob Menendez (D-N.J.), Thom Tillis (R-N.C.) and Kyrsten Sinema (D-Ariz.) the Paycheck Protection Program Small Business Forgiveness Act would allow PPP loans of $150,000 or less to be automatically forgiven once the borrower completes a one-page forgiveness document.
The bill is expected to ease the forgiveness process for approximately 86% of PPP borrowers, in addition to saving an estimated $7 billion and hours of paperwork, the groups said. “This bipartisan legislation would ensure our nation’s small business owners can focus their time, energy, and resources back into their business and communities instead of allocating significant time and resources into completing complex forgiveness forms,” they noted.
A group of 51 state bankers associations also submitted a letter yesterday in support of the bill. “Banks of all sizes will continue to support their business customers and do their part to spur the economic recovery to come,” the associations said. “In order to help our nation’s smallest small businesses, we urge Congress to quickly pass the Paycheck Protection Program Small Business Forgiveness Act to provide necessary relief to millions of small businesses.”
Based on this information and the continuing discussions around Senator Rubio’s bill, we remain hopeful that further streamlining of the forgiveness process is still a possibility. As noted, this bill would save time for our borrowers and for the bank. We have posted a webinar recording on our website, along with the attendant slide deck. As of now, we don’t have plans to do another presentation but, we are always available to answer questions. For now, even though we have made the Forgiveness Application available on our website, our advice remains to stay patient with the process and continue gathering payroll and other supporting documentation.
Welcome to PPP Forgiveness Update #8. Thanks for reading and thanks to those of you that tuned in to Wednesday’s Loan Forgiveness Webinar. We will be presenting another webinar next Thursday, July 9 at 3:00 p.m. Information to access the webinar will be forwarded in the near future. As discussed in the webinar, there have been numerous changes to the loan forgiveness rules. The majority of these changes have simplified the process so it is not nearly as onerous as the initial application and rollout made it seem. This is especially true if a borrower is able to cover 100% of the loan amount through payroll costs, which we are encouraging all of our borrowers to try to do.
There are two things that I wanted to highlight in today’s update. First, the SBA eTran Portal is still not taking applications for loan forgiveness. This means that, even if you submit your application to the bank and we approve for submission to the SBA, the application cannot be forwarded to the SBA until the portal opens. This means the 90 day window for SBA approval does not start until the portal opens.
Second, another bill, authored by Senator Rubio and a few others, seems to be getting some consideration in the Senate. This could drastically alter the process for forgiveness and we recommend that borrowers consider waiting before applying when possible. Highlights of the bill are as follows:
A summary of the bill is linked here, for your review. I don’t know when or if this bill might be passed but, I will keep you posted as we hear updates. Please remember, borrowers have up to 10 months after the 24 week forgiveness period to submit the application for loan forgiveness. If it looks like this bill may pass, it may be worth waiting for it in order to reduce borrower paperwork. If you prefer to move forward with the application now, we are processing applications through our website and will be ready to submit these to the SBA when they begin accepting them.
All in all, it looks like the loan forgiveness process will be much less cumbersome than when originally presented. We are looking forward to assisting each of you to ensure maximum loan forgiveness for all.
Once again, I thank all of you for choosing CFB for your PPP loans. We have been fortunate to be able to serve over 600 businesses, many of whom are working with us for the first time. We hope your experience has been a satisfactory one. We have been humbled by the outpouring of thanks from many of you. During the busiest times of the PPP process, those thanks served as great encouragement to our staff, many of whom were working long hours to make sure we were able to assist as many as possible. The kind comments were greatly appreciated.
Best wishes for a safe, healthy and happy Fourth of July weekend!
Happy Monday to all of our PPP friends! You may have noticed that there was no Friday update last week. That is due to the lack of substantive changes being made to any aspect of the program, including forgiveness. While there have been some minor modifications and clarifications, most have been specific to individual industries and will not apply to most of our borrowers. As you probably know, tomorrow, June 30th, is the last day to apply and be approved for a PPP loan. We are continuing to accept loan applications through noon tomorrow, with the intent of finishing all approvals by 5:00 EST. Once we have processed all applications, we can turn our attention to the loan forgiveness process.
We will be putting on two webinars (possibly more, if demand dictates) to discuss the basics of the PPP loan forgiveness rules and to introduce CFB’s forgiveness application tool. Wednesday’s webinar will begin at Noon EST. If you would like to participate, please copy and paste this link (https://meet.google.com/wjg-goid-sjs) in your internet browser to join the video. The dial-in number is +1 320-429-8169, pin 588750817. The presentation should last no more than 20 minutes, with a Q&A session to follow. Our platform will accommodate up to 250 participants. With about 600 PPP borrowers, you may want to call in early. Our second presentation will be held on Thursday, July 9th at 3:00 pm, EST. The call-in information for that webinar will be provided at a later date. These webinars are intended to provide a high-level overview of the forgiveness guidance and process. We will also continue to provide links to access SBA and Treasury publications relating to PPP loan forgiveness.
While there are variables that impact each of our borrowers’ forgiveness calculations, there are a few things that we believe to be true for the vast majority. Those are as follows:
While we are holding the webinars to provide assistance for those who need it, many, if not most of you, will be able to complete the forgiveness application without assistance from the bank. If additional help is needed, we will still have the SBA processing number, (765) 456-4306, available to provide assistance.
Thank you again for choosing CFB to provide your PPP financing. Many of you who were not previously customers have chosen to move business to our bank and we truly appreciate it! For all, as we move forward through the loan forgiveness process, we understand that financing needs created by this pandemic will not necessarily end with the PPP program. If you need further assistance or if you have other borrowing needs, please keep us in mind.
All the best,
Hello again, PPP customers. I’m happy to be writing to report on good news. What follows, in italics, is an excerpt from a newsletter, sent today, from the American Bankers Association:
The Small Business Administration today released a three-page “EZ” Paycheck Protection Program loan forgiveness application requiring less documentation and fewer calculations than previously required. Form 3508EZ applies to borrowers who meet any one of these three criteria:
Applied for the PPP loan as self-employed, an independent contractor or a sole proprietor with no employees.
Did not reduce salary or wages for any employee by more than 25%, and did not reduce the number or hours of their employees (excepting laid-off employees who refused an offer to return).
Did not reduce salary or wages for any employee by more than 25% during the covered period and experienced reductions in business activity as a result of health directives related to COVID-19.
The streamlined forgiveness form is expected to smooth the forgiveness application process for a substantial portion of PPP borrowers. SBA also updated the regular Form 3508 to reflect recent changes made by Congress in the PPP Flexibility Act and issued a new interim final rule that implements changes made by the PPPFA.
The bolded/underlined emphasis was added by me to emphasize that a borrower only needs to meet one of the criteria in order to use the streamlined form. This should encompass a very high percentage of our borrowers. We are also providing links below to the referenced documents and information. These may help in your preparation and understanding of the process and required documentation. We want to emphasize that we will NOT begin taking applications until July 1, at the earliest. We will do so through a link on our website. Please do not complete and send the applications now. They may still change and we want to avoid duplication of effort. The application that we post on our website will prefill certain information and will save time for both you and the bank.
As a reminder, if you were not a CFB customer prior to the PPP and have had a satisfactory experience with us, we would love to expand our relationship! We have a tremendous staff of commercial, mortgage and consumer lenders, a great treasury management officer, and some of the friendliest and most helpful retail bankers you will ever find. We would love the opportunity to continue to be your bank beyond the PPP process! Our locations can be located on our website – www.cfbindiana.com/locations.
The SBA has released a new PPP Loan Forgiveness Form, Form 3508EZ:
Also, the SBA released a revised and shorter version of the full PPP Loan Forgiveness Application:
Time for the weekly PPP update that I know you all look forward to! Our legislative bodies continue to make progress on passing and communicating changes to the forgiveness rules and process. This week saw President Trump sign into law the changes that were discussed in last week’s update. Further clarification has been given regarding some of those changes. Specifically, there are avenues for relief of the “headcount rule” for those companies that have either not recalled all of their previous employees due to lack of business and for those who have tried to recall workers but the workers have refused to return. Additional discussion around these topics will follow, at a later date. The interim rule also clarifies that if a borrower submits an application for forgiveness within 10 months of the end of the forgiveness period, the borrower will not have to make any payment on the loan before the date the SBA remits the forgiven amount to the lender. The rule also confirmed that the last day a lender can obtain approval for a PPP loan is June 30th.
Unfortunately, no ruling has been made yet regarding a de minimis loan level, under which a streamlined process for forgiveness would be applicable. As mentioned in the previous update, every state banking association has issued support for legislation creating this threshold. We in the banking industry remain hopeful that this will be implemented prior to the start of the forgiveness process.
CFB has made some changes to our forgiveness plan. With the period for new loans ending on June 30th, we have decided to begin accepting applications for forgiveness on July 1. Whether your loan was directly processed by CFB or processed through Windsor, we will be working with you to process forgiveness applications. With any luck, legislation will be passed streamlining the process for smaller loans. Regardless, we will be prepared with an accurate and efficient system to assist in applying for loan forgiveness. We also plan to present at least one and possibly more informational conference calls or webinars to assist those with questions. In the interim, we continue to encourage you to collect supporting documents such as payroll records, bank loan statements, rent and utility receipts and any other documentation supporting qualified expenses.We thank you again for your business and your patience with this continually evolving process. Best wishes to all for a great weekend.
As many of you may have already heard, the Senate has passed a bill amending PPP forgiveness guidance that will likely benefit all of our PPP borrowers. While the bill is still awaiting the President’s signature, we believe it is unchanged from the version passed by the House. The most significant changes are as follows:
It is our hope and belief that, with these changes, nearly all of the PPP loans made by CFB will be fully forgiven. We are still awaiting word on possible changes that would simplify the forgiveness process for loans at a de minimis level. The most recent updates I have read have set that level at $350,000. Loans below that amount would simply require submission of a borrower attestation, along with certain supporting documents. This change has not been passed but, neither has it been dismissed. As in earlier updates, I would encourage you to contact your government representatives to ask for their support of this change.
Because of the possibility of additional changes, we are still encouraging each of you to continue to gather documentation (payroll information, receipts, leases, etc…) evidencing payroll and other qualifying expenses, while continuing to wait to submit a forgiveness application. We are moving forward in developing our process for processing forgiveness applications, with a goal of finalizing and releasing our process by June 15. We will continue to issue updates, as new information becomes available.
We thank you for your continued patience through this evolving process. We appreciate the opportunity to be of service. Please feel free to contact us if you have questions prior to the next update.
As the process of reopening the economy continues, I hope that all of you are remaining healthy and beginning to see signs of recovery in your businesses. While we are not yet close to being fully “open,” we are seeing and hearing encouraging signs from many of our customers.
As many of you may have read or heard, the House of Representatives has passed a bill modifying several items within the Paycheck Protection Program. Key items included a lengthening of the “forgiveness period” from 8 weeks to 24 weeks. This modification would allow an extended period of time in which a borrower can spend the PPP funds and have them forgiven. There has been some discussion in the Senate about a 16-week forgiveness period. We will have to wait and see what time period they settle on, if they pass any changes. Also, the house bill reduces the minimum payroll amount from 75% to 60%, allowing more flexibility in the use of PPP funds. The bill also stretches the deadline to rehire workers and extends the repayment period on unforgiven amounts from two years to five. These should all be positive changes for PPP borrowers and I encourage you to let your Senators know that you support them.
An additional piece of news is that 51 different state banking associations (Puerto Rico is the 51st, in case you were wondering) have, in a letter to the Treasury Department and the U.S. Small Business Administration, called for a de minimus exception for small borrowers that would provide complete PPP loan forgiveness upon the completion of a simplified, one-page attestation. While the de minimus level was not specified, this change would save many hours of documentation and calculation for both borrowers and banks. We also encourage you to support this initiative.
While the timeline for final approval of the proposed changes is not concrete, we hope to see them discussed and passed in the next several days. Until then, we are encouraging our borrowers to continue compiling payroll, utility and interest data. We do not believe it would be productive to complete the forgiveness application prior to a final ruling on the proposed changes. We will continue to notify you as we receive additional information and will be sending you a current application when we start the forgiveness process.
Best wishes for a great weekend and continuing recovery.
Robb BlumeCEO & PresidentCommunity First Bank of Indiana
We would like to give you some updated information regarding PPP loan forgiveness. While no formal rule changes or guidance has been issued, a couple of points have been clarified.
First, the current 8 week payroll forgiveness period can begin on either the date the loan is funded or on the date a borrower’s first payroll during that period is funded. All non-payroll expenses should be tracked from date of funding.
Second, the reference to lease payments being part of forgivable uses included Real & Personal property lease payments, meaning that equipment leases are included.
Third, the term “incurred and paid” has been clarified to mean incurred or paid. This means that payroll or other expenses incurred but not yet paid during the forgiveness period can be counted toward forgiveness.
Last, SBA and Treasury have stated that borrowers won’t be penalized for a reduced headcount if employees have been offered employment but have refused to come back. We suggest documenting any employment offers, in writing.
We still expect further guidance to be released but, we do not have a firm date. We do know that there are numerous conversations regarding expanding the forgiveness period, creating a threshold below which all loans would be 100% forgiven, eliminating the 75% payroll requirement and other changes which increase the ease of forgiveness.
State, regional and national banking associations are doing a fine job of lobbying for additional information and an easing of forgiveness requirements. If you are so inclined, it never hurts to urge your representatives to assist on this issue.
We thank you again for your continued patience as we await further instructions on how to process forgiveness requests. We will continue to provide additional communications, as we receive them.
Best wishes for wonderful holiday weekend.
We are pleased to have been able to help so many organizations secure funds through the SBA Paycheck Protection Program (PPP). The PPP allows for all or a portion of the loan and accrued interest to be forgiven if the proceeds are used for payroll and certain non-payroll costs over the 8 weeks after receiving the loan proceeds. The final Loan Forgiveness Application (“Application”) with borrower instructions was just released by the SBA. You can find the application by clicking the button above.
We are in the process of reviewing the final application and establishing procedures for processing the more than 540 PPP loans that were originated by Community First Bank. We expect to send a formal instruction package on or about June 1, 2020 which will include an electronic means of providing us your Application. We will be encouraging all borrowers to submit their Application and supporting documentation through a secure link on our website. Once we have our secure website open to accept Applications, we will send another email to start the process.
The PPP provides all lenders 60 days to approve the Application for the loan forgiveness amount. Although we will strive to process your application as quickly as possible, given the volume of Applications that will be received by Community First Bank we cannot promise that your Application will be processed any faster than 60 days. We will be communicating with all PPP customers throughout this process. We thank you for your patience.
You may contact us at (765) 456-4306 or contact your relationship officer directly.
Click here to review press release: https://www.cfbindiana.com/wp-content/uploads/2020/05/Forgiveness-Press-Release.pdf
If you have questions during business hours (M-F, 9:00am-5:00pm), please call (765) 456-4306. If you have questions outside of businesshours, please email email@example.com include a call back number and a representative will assist you with your questions.
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