PPP Loan Forgiveness
Starting Your Forgiveness Application
CoreFirst has partnered with CliftonLarsonAllen (“CLA”) to assist us in reviewing your PPP loan forgiveness application and provide you with an easy online tool to provide us with the information needed for the SBA. Applications can only be submitted via the CLA portal. We are unable to accept forgiveness applications via email or in person.
The portal can be accessed using the following url:
CLA will be using their online portal to aid in the secure upload of your application and supporting documents. The portal is very user friendly and convenient for document transfer and allows you to:
- Setup multifactor authentication for access
- View instructional videos on how use the portal
- View instructional videos on how to proceed with your PPP forgiveness application
- Enter questions you have on your PPP forgiveness application
Loan Forgiveness Information
PPP borrowers may be eligible to have all or some of their PPP loan forgiven if funds are used appropriately and the borrower files a Forgiveness Application. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness may be reduced if full-time headcount declines, or if salaries and wages decrease. The Forgiveness Applications and Instructions include several measures intended to reduce compliance burdens and simplify the process for borrowers, including:
- Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
- Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the covered period after receiving their PPP loan
- Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
- Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by December 31
- Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined
Paycheck Protection Program Flexibility Act (PPPFA)
On June 5, 2020, several significant changes were made to the SBA’s Paycheck Protection Program (PPP). On June 17, 2020, further guidance from the SBA and the US Department of the Treasurywas published regarding how these changes will be implemented. In addition, revised Forgiveness Applications and Instructions were released in an effort to simplify the process.
- Spend less of your loan on payroll and get it forgiven. Originally under the CARES Act, to have your PPP loan forgiven you had to spend 75% of your loan proceeds on payroll costs. This threshold was lowered to 60% as part of the PPPFA allowing businesses to spend up to 40% of their loan proceeds on non-payroll costs (utilities, mortgage interest or rent) and still be eligible for full forgiveness. Those that don’t meet the 60% requirement may still be eligible for partial forgiveness.
- More time to use your loan proceeds. The original requirement was for loan proceeds to be spent within eight weeks of the date of disbursement. The PPPFA extends that eight-week period to 24 weeks or 12/31/2020 whichever comes first allowing more time to use the funds and to maximize forgiveness if necessary. Borrowers with approvals prior to June 5th, can choose to use the original eight-week period to track and report eligible expenses and apply for forgiveness. If the 24-week covered period is chosen, Borrowers can apply for forgiveness at any time during that period once their eligible expenses reach or exceed the loan amount.
- More time to fill positions if you had layoffs. Originally, rehiring of laid-off staff by June 30th was necessary to be eligible for full forgiveness; however, the PPPFA extended that deadline to December 31st and provided additional safe harbors for those unable to rehire laid-off workers.
- Extended times to submit a simplified Forgiveness Application. Businesses have up to ten months from the end of their Forgiveness Covered Period or Alternate Covered Period to submit their Forgiveness Applications to CoreFirst Bank. The SBA has also published a simplified Forgiveness EZ Application (SBA Form 3508EZ) that some borrowers may be eligible to utilize.
- Deferment of loan payments. Payments were originally deferred for six months from the disbursement date; however, under the PPPFA the monthly payments are deferred until the date on which the SBA remits the amount of forgiveness to CoreFirst Bank or ten months after the last day of the forgiveness covered (or alternate covered) period if Borrower fails to apply for forgiveness. This deferment is automatic and no action is necessary on your part. Per the PPPFA, CoreFirst Bank will communicate to each Borrower at least 30 days prior to the date of any first payment.
- Option to extend the maturity date for unforgiven loan proceeds. Maturity dates initially were for two years as originally prescribed by the CARES Act. With the passing of the PPPFA, borrowers and lenders have the option to mutually agree to extend the term of the loan to five years. As part of our review process for Forgiveness Applications, CoreFirst Bank will discuss this option with each borrower not meeting the SBA requirements for full forgiveness. There is no action necessary on your part until our Forgiveness Application review is complete and our submission of your application to the SBA for approval is ready.
Interim Final Rule on Appeals of SBA Loan Review Decisions - August 11, 2020
Interim Final Rule on Loan Forgiveness - May 22, 2020