SVB and Government Relief Programs Frequently Asked Questions

 
Supporting employees, clients and communities around the world

Latest SBA Guidance

What is the latest guidance from the SBA on PPP loan forgiveness?

 
The following guidance from the SBA is as of July 23, 2020 and is expected to evolve and change as the SBA provides additional guidance. We encourage borrowers to refer to Treasury.gov or SBA.gov for the latest guidance, forms and FAQs.
  • Borrowers with loans approved by the SBA before June 5, 2020 will be able to choose between an 8-week and a 24-week Covered Period when applying for loan forgiveness starting, in each case, as of the date loan funds were disbursed.
    • Borrowers with loans approved by the SBA after June 5, 2020 will only have the option of a 24-week Covered Period.
  • During the Covered Period, borrowers must use at least 60% of PPP loan proceeds for eligible payroll costs to qualify for full Loan Forgiveness, down from 75% under the initial forgiveness framework.
  • Borrowers can use up to 40% of funds for eligible non-payroll costs, up from 25% under the initial forgiveness framework.
  • If a borrower applies for PPP loan forgiveness, the borrower won't have to start making payments on the outstanding PPP loan until the SBA makes a decision with respect to forgiveness eligibility or remits the forgiveness amount to SVB. If a borrower seeks forgiveness of its PPP loan, they will have to submit a forgiveness request within 10 months after the 24-week Covered Period ends (even if the borrower elects the 8-week period).
  • If a borrower does not apply for forgiveness, they won’t have to start making payments until 10 months after the 24-week Covered Period ends.
  • Borrowers may be able to use FTE Safe Harbor provisions if they have fewer full-time equivalent (FTE) employees now than when they applied for the PPP loan, if they can document an inability to:
    • Rehire individuals who were employees as of February 15, 2020
    • Hire similarly qualified employees for unfilled positions on or before December 31, 2020
    • Return to the level of business activity they had before February 15, 2020 due to compliance with requirements or guidance from the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration from March 1, 2020 through December 31, 2020, related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19
  • The SBA provided an updated PPP forgiveness application form (SBA Form 3508) and an “EZ” forgiveness application form (SBA Form 3508EZ) for eligible borrowers. The SBA 3508EZ form requires fewer forms and calculations, but a similar level of documentation. It applies to borrowers that:
    • Are self-employed, independent contractors, or sole proprietor, who have no employees; OR
    • Have not reduced the number of employees AND have not reduced salary/wages by more than 25% during the Covered (or Alternative Payroll Covered) Period for employees earning less than $100K in 2019; OR
    • Are not able to operate at the same level of business due to COVID-related requirements AND have not reduced salary/wages more than 25% during the Covered (or Alternative Payroll Covered) Period for employees earning less than $100K in 2019. 
  • Borrowers may submit an application for forgiveness before the end of the 8-week or 24-week covered period, provided that
    • The borrower has used all of the loan proceeds for which the borrower is requesting forgiveness; and
    • The borrower's loan forgiveness application accounts for any salary reduction in excess of 25% for the full covered period.

When can borrowers apply for PPP loan forgiveness?

 
The SBA is not currently accepting forgiveness applications. We expect the SBA to open its new forgiveness portal to lenders in August, pending any new legislative amendments to the forgiveness process. We are monitoring the SBA closely for any relevant updates.

In the interim, we recommend reviewing SVB's PPP website for information on how to prepare for forgiveness. 

We will inform you when we begin accepting forgiveness applications. Based on the latest guidance from the SBA, we expect this date to be in mid-to late August. Until then, SVB is not accepting forgiveness applications. 

Does a borrower need to inform SVB and/or the SBA if it is entering into or considering a change in ownership?

 
Any change in the direct ownership of a PPP borrower (any change in either direct owners or percentage ownership of existing owners) without SBA and SVB prior consent would be a default under the PPP loan note.

In order to facilitate requesting consent from the SBA for a change in ownership, we require borrowers to provide information about the transaction to SVB prior to any change in a PPP borrower’s direct ownership. You can find instructions and a complete list of required information here.

Please note that while SVB will submit the consent request to the SBA in a timely manner, we will have little visibility into the process and timing regarding SBA’s response.

Preparing for Forgiveness

What should PPP loan recipients do prior to the forgiveness process starting?

 
Borrowers should monitor SBA.gov for the latest guidance on loan forgiveness. SVB also recommends that you:

1. Become familiar with the updated SBA PPP forgiveness application form (SBA Form 3508) and the “EZ” forgiveness application form (SBA Form 3508EZ) for eligible borrowers. If you are using the SBA Form 3508, complete the PPP Schedule A Worksheet before starting your online forgiveness application with SVB.

2. Document expenses, both payroll costs and other eligible expenses incurred directly by the borrower named on the PPP loan note during your chosen covered period.

Many payroll services companies or professional employer organizations (PEO) are producing special reports that document payroll expenses during the covered period (either 8 weeks or 24 weeks after the date of your loan funding). If you use a PEO, inquire to see if they can prepare a report tailored for forgiveness for you. This could streamline your documentation requirements.

3. If a PPP borrower is entering into or considering a change in its ownership, the borrower must first receive consent from the SBA and SVB. In order to facilitate requesting consent from the SBA, borrowers must provide us with information about the transaction prior to an ownership change of the PPP borrower occurring. You can find instructions and a complete list of required information here. Any unapproved change of ownership may affect your PPP loan forgiveness. 

Please note that while SVB will submit the consent request to the SBA in a timely manner, we will have little visibility into the process and timing regarding SBA’s response.

4. Evaluate your options to determine when it is best for your business to apply for forgiveness when SVB starts taking applications. Please note that the SBA may provide further guidance regarding PPP loans and the forgiveness process in the coming weeks. The AICPA also has additional guidance.

5. We will inform you when SVB begins accepting forgiveness applications. Based on the latest guidance from the SBA, we expect this date to be in mid-to late August. Until then, SVB is not accepting forgiveness applications, even for borrowers that have completed their 8-week covered period.

You will need to certify and provide documentation that you used the loan funds for SBA-eligible purposes. It is your obligation, as the borrower, to make sure you understand the SBA's rules and that your application is true, complete and correct, and complies with the SBA’s requirements for forgiveness. Loan forgiveness is not automatic and must be requested through Silicon Valley Bank. Other eligibility requirements may apply.

Please note: Our client support team has no further information on PPP loan forgiveness at this time. We ask that you wait for us to contact you with next steps and timing for when you can request loan forgiveness through Silicon Valley Bank.

Will Silicon Valley Bank provide a forgiveness calculator to help clients with their calculations?

 
SVB is not providing a forgiveness calculator. Once open, the online application will perform the basic arithmetic required to calculate the eligible forgiveness amount based on inputted covered expenses.

What other resources should borrowers consult to help with the forgiveness application?

 
Silicon Valley Bank recommends borrowers refer to the SBA.gov and Treasury.gov for additional information, as forms and guidance related to the Paycheck Protection Program continue to rapidly evolve and are subject to frequent changes. At a minimum, please make sure you have reviewed the latest information prior to submitting a forgiveness application. It is your obligation, as the borrower, to make sure you understand the SBA’s rules and that your application is true, complete and correct, and complies with the SBA’s requirements for forgiveness. Loan forgiveness is not automatic and must be requested through Silicon Valley Bank. Other eligibility requirements may apply.

Applying for Forgiveness

Is SVB and the SBA currently accepting applications for forgiveness?

 
The SBA is not currenrly accepting forgiveness applications. We expect the SBA to open its new forgiveness portal to lenders in August, pending any new legislative amendments to the forgiveness process. We are monitoring the SBA closely for any relevant updates.

We will inform you when we begin accepting forgiveness applications. Based on the latest guidance from the SBA, we expect this date to be in mid- to late August. Until then, SVB is not accepting forgiveness applications.

In the interim, we recommend reviewing SVB’s PPP website for information on how to prepare for forgiveness.

What is the difference between the SBA’s updated forgiveness application (SBA Form 3508) and the SBA 3508EZ form?

 
The new SBA 3508EZ form requires fewer forms and calculations and applies to borrowers that:
  • Are self-employed, independent contractors, or sole proprietor, who have no employees; OR
  • Have not reduced the number of employees AND have not reduced salary/wages by more than 25% during the Covered (or Alternative Payroll Covered) Period for employees earning less than $100K in 2019; OR
  • Are not able to operate at the same level of business due to COVID-related requirements AND I have not reduced salary/wages more than 25% during the Covered Period (or Alternative Payroll Covered Period) for employees earning less than $100K in 2019. 

When is the latest time clients can submit a forgiveness application?

 
Borrowers must submit their applications for forgiveness within 10 months after their covered period ends. Borrowers won't have to start making payments until the SBA makes a decision or remits the funds.

Borrowers may submit an application for forgiveness before the end of the 8-week or 24-week covered period, provided that
  • SVB has started accepting forgiveness applications; and
  • The borrower has used all of the loan proceeds for which the borrower is requesting forgiveness; and
  • The borrower’s loan forgiveness application accounts for any salary reduction in excess of 25% for the full covered period. 

What does the eight-week and 24-week covered period mean and when does it start?

 
The 8-week and 24-week covered periods refer to the time period during which costs must be incurred or paid to be eligible for forgiveness. The covered period starts immediately following the disbursement of the loan to the borrower.

Can the Alternative Payroll Covered Period be used for all expenses?

 
The Alternative Payroll Covered Period can only be used for payroll expenses. The covered period must be used for non-payroll expenses. Please visit the SBA Loan Forgiveness Application Instructions for further details.

What accrued interest is owed if the loan is fully or partially forgiven?

 
Accrued interest on the portion of the PPP loan that is forgiven will not be owed. The amount of loan forgiveness may be up to the full principal amount of the loan plus accrued interest.

What counts as a payroll expense?

 
Payroll costs include:
  • Cash compensation: For employee salary, wages and tips, the maximum allowed will be $46,154 per individual for a 24-week covered period and $15,385 for an 8-week covered period – both based on an annual $100,000 maximum, including costs for vacation, parental, family, medical or sick leave
  • Taxes: Payment of state and local taxes assessed on compensation of employees, including unemployment insurance taxes (Federal taxes and FICA cannot be included)
  • Health insurance: Payment for employee health insurance, including employer contributions to a self-insured, employer-sponsored group health plan, but excluding any pre-tax or after tax contributions by employees
  • Retirement plan: Payment for employee retirement plans, excluding any pre-tax or after-tax contributions by employees
  • Owner compensation: the maximum allowed will be $20,833 (equivalent to 2.5 months of the annual maximum of $100,000) for a 24-week covered period and $15,385 for an 8-week covered period

What documents does a client need to apply for forgiveness?

 
The SBA requires documents supporting payroll expenses, non-payroll expenses, and FTE counts. A full list of the SBA documentation, submission and retention requirements can be found on the PPP Forgiveness Application (SBA Form 3508) instructions and the SBA Form 3508EZ application instructions.

We encourage our clients to provide Silicon Valley Bank with Professional Employer Organization (PEO) or payroll service company reports to evidence these items. In many cases, these providers are creating specialized reports that correspond to a client’s covered period.

Is it possible to have some of the PPP loan forgiven, but not all?

 
Yes, it is possible to apply/be approved for partial forgiveness. The remaining PPP loan amount and any interest accrued on such amount will be payable according to the terms of the PPP Promissory Note.

What will happen if the SBA declines a borrower’s forgiveness application?

 
Borrowers will be notified by Silicon Valley Bank if the SBA determines that all or part of the loan is not forgivable. If the borrower does not agree with the SBA’s decision, they may appeal. We expect that the SBA will provide further guidance with respect to the appeals process. Borrowers will be required to start repayment of any portion of the PPP loan that is not forgiven.

Do borrowers need to make payments on their PPP loan after they submit their forgiveness application?

 
Borrowers will need to start making payments at the end of the deferral period with respect to any portion of the PPP loan that is not forgiven.

For borrowers that apply for forgiveness, their deferral period will end once their forgiveness application is approved by the SBA. For those that do not apply for forgiveness, the deferral period will end 10 months after the end of the covered period (24 weeks).

The primary admin is not an authorized signor, how can the primary admin get the application to the authorized signor to sign?

 
On the forgiveness application borrowers will have the option to update the signor of the application by entering their email. This will route the final signature to them prior to submission of the application.

What can borrowers expect after submitting a forgiveness application?

 
Borrowers can check the status of their application in Silicon Valley Bank’s Online Banking within the My Tasks area. SVB has 60 days to review the application and supporting documents upon receipt of a complete application. The accuracy and completeness of the information provided will impact how quickly the application can be processed. If SVB has questions about the application, we will contact you directly.

Once the application has been reviewed and deemed to be complete, SVB will submit it to the SBA. The SBA has 90 days to review and respond to SVB. SVB will inform the borrower once the SBA has provided its decision with respect to forgiveness.

In addition to Online Banking, as the status of the application changes, the primary admin can expect to receive updates via email.

Loan Repayment

How do I repay all, or a portion, of my PPP loan?

 
If you would like to repay your PPP loan, please follow the process on SVB Learning Central and send an email to PPPRevokeRequest@svb.com with the required information. Repayment of your PPP loan is final and may not be revoked.

SVB Client Programs

How is SVB helping clients?

 
What matters to us is listening to your needs, being flexible with our solutions and being patient in our approach. SVB’s venture debt relief initiative, launched on April 1, has enabled more than 1,000 startups to defer their principal payments on a combined $2.1 billion in funded debt for six months. The Premium Wine Division is enabling a majority of clients to defer principal payments for three or six months, and SVB Private Bank clients are given the option to defer mortgage payments for 90 days.

SVB also participated in the Paycheck Protection Program under the US CARES Act, and we are in the process of applying to become an accredited lender in the UK under the Coronavirus Business Interruption Loan Scheme (CBILS).

How does SVB venture debt relief work?

 
The venture debt principal deferral program was launched on April 1, 2020 and is an SVB-only program, not under the auspices of any government agency. The program is applicable to SVB venture debt borrowers with a funded term loan balance or aggregate term loan commitment of $10M or less. The program defers all principal payments for six months. Eligible borrowers were notified by SVB directly. The program has enabled more than 1,000 startups to defer their principal payments on a combined $2.1 billion in funded debt for six months.

How do I keep up-to-date on what is available from SVB?

 
This is a fluid situation and we intend to communicate with our clients frequently. Please be patient as we try to get back to your calls and questions as quickly as we can. In addition to your Relationship Managers, Relationship Advisors and Client Service, please seek information from our COVID-19 Relief website here: www.svb.com/covid-relief

What is SVB's point of view about new client lending and whether clients should draw down on loans or lines of credit?

 
We have the financial capacity and willingness to lend. We have a highly liquid balance sheet, and we have the capability meet our clients’ needs now and invest for the future. As with any major financial decision, we recommend that you consult your advisors before accessing credit. If you have cash and don’t need to borrow now, you may want to wait instead of incurring additional debt service costs.

Government Programs

Is SVB an SBA Lender?

 
Yes, we are an approved SBA lender and are able to process PPP loan applications.

What is the process to apply with SVB for PPP?

 
Please visit www.svb.com/paycheck-protection-program to review the process.

Who should apply for the PPP?

 
The PPP program is specifically designed for those companies who can certify that they need the funds under the PPP requirements. We ask that you carefully consider how the COVID-19 crisis has actually impacted your ability to fund payroll, rent, mortgage interest or utilities before you sign your loan certification.

Why might I be turned down for a PPP loan?

 
In addition to the eligibility requirements of the PPP program, there are a number of SBA rules and requirements that may apply to your application. Also, all PPP applications are subject to a verification process to ensure that the payroll costs and other inputs required to determine the eligible loan amount as well as the know-your-customer review that banks are required to conduct by law. These and a number of other factors may have bearing on whether an application is accepted or declined.

Am I eligible for PPP if I’m a venture-backed company?

 
As of now, the affiliation rules are in force, which means venture-backed companies will need to consider them when determining their eligibility for a PPP loan. As part of the application process, we will ask you to make additional representations set forth below. We will not require you to provide a legal opinion in connection with your application.

In order to ensure that you take the SBA's affiliation rules into account and to help you consider some of the scenarios that might trigger affiliation under these rules, we will ask you to make these additional certifications when you complete your application. Please consult your legal counsel as you review them:

  1. No business which, when combined with the Applicant, would have more than 500 employees (or any higher number provided in SBA standards for the relevant industry): (a) owns or controls more than 50% of the Applicant's equity, or (b) has, pursuant to the Applicant's charter, bylaws or shareholder agreements, the ability to prevent a quorum or otherwise block action by the Applicant board of directors or shareholders, or (c) has the ability to control day-to-day activities of the Applicant through its Board or Shareholders (including for example, setting employee compensation, hiring and firing of executives, and purchasing or selling equipment);
  2. The Applicant is not one of the types of businesses ineligible for SBA business loans (see 13 CFR 120.110), nor is any owner of 20% or more of the business;
  3. The Applicant has considered the SBA's affiliation rules and included the employees of its affiliates (at any level) when determining its eligibility for this program; and
  4. The Applicant has considered existing options, convertible securities, and agreements to merge when determining its eligibility for this program.

Is SVB offering loans under the Main Street Lending Program?

 
We are currently assessing the updated program framework and details that were announced by the Federal Reserve on April 30, 2020. As we evaluate the changes to the program, we are also continuing to listen to our clients to understand their needs and aiming to be flexible with our solutions.

Is SVB participating in the Coronavirus Business Interruption Loan Scheme (CBILS) in the UK?

 
SVB is in the process of applying to become an accredited lender under the Coronavirus Business Interruption Loan Scheme (CBILS).

Community Programs

Please share details about SVB’s Community Response.

 
SVB is targeting philanthropic efforts in three primary areas: health, food security and shelter, and small business relief. The bank has committed $5.5 million to COVID-19 charitable relief initiatives across the eight countries and 15 US states where the bank operates. This includes corporate contributions to global, national and regional charities, direct community-based giving and a 3:1 match for SVB employees’ donations to relevant causes. In addition, SVB will contribute net PPP loan origination fees it receives from the SBA to relief efforts.

The COVID-19 Global Impact & Innovation Fund, in partnership with Founders Pledge on March 30, 2020 was established to identify and consolidate into a single fund high-impact organizations that are creating solutions to the pandemic crisis. The fund is now focused on activities to help slow COVID-19’s spread and provide immediate relief to those affected. Looking ahead, it will target initiatives to better prepare for future pandemics. SVB made an initial $1 million investment in the fund, and we invite you to join us. Learn more and donate at https://www.founderspledge.com/svb-covid-19.

As part of our regional effort, SVB offices have supported many health, food security and shelter organizations. In the UK, for example, SVB has partnered with Meals for the NHS, a tech ecosystem initiative to provide much needed meals to frontline hospital staff that are dealing directly with COVID-19. Meals for the NHS is now operating across 75 hospitals in 21 towns and cities across the UK. Learn more at mealsforthenhs.com. In the US, SVB is supporting a similar effort nationwide led by Frontline Foods.

SVB is also supporting emergency small business grants through our partner Hello Alice's Business for All initiative. Hello Alice provides grants and guidance to small, women- and minority-owned businesses and hosts a free COVID-19 Business Resource Center to link these businesses to relief programs, funding opportunities, mentors and other support programs designed for New Majority entrepreneurs. To learn more and apply for emergency grants, visit www.covid19businesscenter.com/.