Important PPP Update
After the approval of the additional $310 billion to the Small Business Administration Paycheck Protection Program (PPP) last week, our team has continued to work diligently to process hundreds of applications to help businesses to apply for round two of program funding.
We’re happy to have helped businesses across Northeast Ohio to receive PPP funding. However, given the overwhelming demand for the program, we are working on completed loan applications in our pipeline. At this time, it is unlikely that we will be able to process additional requests above what is currently in our pipeline.
Please be assured that if you have already submitted an application through First Federal Lakewood and it is approved by the SBA, we will contact you to complete the process.
If you have applied at another financial institution, please consult with them first on the status of your application before moving forward with a new application at another bank. The SBA will only approve one application per eligible borrower.
We understand the uncertainty you may be experiencing during this time, and we are working hard on your behalf. Thank you.
Preparing for Loan Forgiveness
The Small Business Administration (SBA) and the Treasury continue to provide updated guidance and the information here is accurate as of May 5, 2020. The SBA is the best source for detailed information regarding PPP loans and forgiveness criteria.
This communication is based on preliminary guidance
from the SBA as of May 5, 2020 and is subject to change
As of the most recent Guidelines:
- Loan funds must be used within eight (8) weeks of loan disbursement to be eligible for forgiveness.
- Funds used for payroll, mortgage interest, rents and utility payments can be considered eligible for debt forgiveness.
- 75% of the total PPP loan amount must be used for payroll expenses to be considered for loan forgiveness.
- Subject to certain guidelines, borrowers who rehire laid off workers by June 30, 2020 will not be penalized for having a reduced payroll at the start of the period.
- Funds used after the eight-week window or used for ineligible expense will convert to a business loan and repaid within two (2) years at an interest rate of 1% annually.
- Borrowers requesting loan forgiveness will be required to maintain and submit acceptable documentation supporting “allowable” uses of PPP funds.
As you prepare for PPP loan forgiveness, please click here to download key information you will need to process your loan forgiveness application (from the SBA, as of May 5, 2020.
If you are self-employed and have questions about a PPP loan and potential unemployment benefit eligibility please see www.sba.gov/coronavirus for guidance.