Paycheck Protection Program
Status - September 15, 2020
We are now accepting PPP forgiveness applications via SVB Online Banking. In order to provide a smooth client experience, we are inviting borrowers to apply in phases. Borrowers will be notified via email when they may apply for forgiveness. Please note, it will take us several weeks to invite borrowers.
The PPP forgiveness application will include an SVB Online Banking digital application, an expense documentation guide, and on-demand training materials. Knowledgeable support teams will help you navigate the challenging SBA requirements.
We continue to monitor the ongoing developments with congressional legislation and SBA guidance, including the congressional debate about easing the burden for borrowers with PPP loans of $150,000 or less.
As you prepare for forgiveness, we recommend reviewing the steps below and SVB’s FAQs for details on how to prepare for forgiveness.
Steps for Forgiveness1. Determine which SBA form you will use.
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.
In order to use the “EZ” forgiveness application (SBA Form 3508EZ), one of the following must apply to your business:
• Sole Proprietor – You are self-employed, an independent contractor, or sole proprietor who had no employees at the time of your PPP loan application.
• Employer – You have not reduced the number of employees at all since January 1, 2020 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.
• COVID-Impact – You are not able to operate at the same level of business due to COVID-related requirements AND you have not reduced salary/wages more than 25% during the Covered (or Alternative Payroll Covered) Period for employees earning less than $100K in 2019.
If none of the preceding statements apply to your business, you will need to complete SBA Form 3508. If you are unsure, we recommend completing SBA Form 3508.
Note: If you are using SBA Form 3508, complete the PPP Schedule A Worksheet before starting your online forgiveness application with SVB.
2. Gather the required documentation.
While completing the forgiveness application, you will be required to submit supporting documents.
Review SVB's Documentation Guide and gather the documents outlined. If you have additional questions, we recommend reviewing the SBA's resources at SBA.gov and Treasury.gov.
Document your expenses, both payroll costs and other eligible expenses, incurred during your chosen covered period by the borrower named on the PPP loan note . Many payroll services companies or professional employer organizations (PEO) can produce tailored 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 payroll service/PEO, ask if they can tailor a report for your forgiveness application. This will streamline your documentation requirements.
3. Determine the best time to apply for forgiveness.
Evaluate your options to determine when it is best for your business to apply for forgiveness.
PPP borrowers do not need to apply immediately. Some reasons include:
• The SBA may release more guidance and ease rules in the coming weeks. We are eagerly watching to see if congress approves a no-documentation fast approval form for loans under $150,000. The AICPA also has additional guidance.
• Clients electing to use a 24-week Covered Period may apply before the end of their Covered Period.
• Per the SBA’s FAQ on PPP Loan Forgiveness dated August 4, 2020, “As long as a borrower submits their loan forgiveness application within ten months of the completion of the Covered Period, the borrower is not required to make any payments until the forgiveness amount is remitted to the lender by SBA”. (Source: General Loan Forgiveness FAQs, Question 3)
• SBA documentation requirements are complex. We suggest taking the time to assemble the right information and documentation to reduce friction in the process.
Other clients may want to apply as soon as possible due to a pending change in ownership, including an acquisition. Note that SVB has 60 days and the SBA has 90 days to process forgiveness requests, so finalizing the forgiveness process may take time regardless of your application date.
4. Access your PPP Loan Forgiveness Application
In order to provide a smooth client experience, SVB is inviting borrowers to apply in phases. Borrowers will be notified via email when their application is available in SVB Online Banking.
Our Client Support team has no additional information on the timing of your invitation. We ask that you wait for us to contact you regarding your loan forgiveness application .
For more information, please visit our FAQ page.
Important: 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.
SBA Rules on Changes in Ownership
Many PPP borrowers are considering transactions that involve changes in the borrower’s equity ownership (e.g. raising equity, mergers, etc.). 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 SVB requesting consent from the SBA, 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, timing and content of the SBA’s response to any request for a PPP borrower to change its equity ownership.