(Updated September 28, 2020)
Community Bank & Trust is providing this FAQ Guide for the SBA’s Paycheck Protection Program (PPP) to assist you in the forgiveness application process. We encourage you to review the materials and SBA application instructions before beginning the application process.
Community Bank & Trust cannot provide legal, tax or accounting advice on the SBA PPP. Please consult your legal and/or financial advisors. The SBA retains sole authority for PPP Program eligibility and forgiveness decisions.
General Program Information
In addition to these FAQ’s, there are a number of resources available to help:
- SBA Application and Instructions:
- CBT Portal Knowledge Center - The CBT online portal has a “Knowledge Center” to assist you with basic concepts and guidelines related to the forgiveness application process. We encourage you to use the Knowledge Center during your application process before contacting the Bank with questions. The Knowledge Center button is located on the left side of the main screen within the online portal.
No, you must apply for forgiveness through CBT. Applications will be accepted via our digital portal only. We will contact you by e-mail when we are ready to accept your application and will provide instructions to for your application, including portal access, at that time.
It is to your advantage to apply for forgiveness, but you are not required to apply. If you do not submit an application for forgiveness, you will be required to begin repayment of the loan as described in your loan documents. The Bank will notify you of the due dates and amounts of your monthly payments necessary to fully repay the loan over the remaining term of your loan.
The SBA. Upon receipt of a completed application, the bank is responsible for making a preliminary determination as to the maximum potential forgiveness. The bank will then submit your application to SBA who has final review and approval authority.
Under the SBA rules, the Bank must process your application within 60-days of submission. The SBA has 90-days to process your application and fund forgiven amounts. However, if your application requires follow-up, that time may be extended. The Bank will notify you by e-mail when the SBA has made a decision on your application.
Any portion of your PPP loan that is not eligible for forgiveness will be converted to a term loan and you must repay the principal and interest on the amount of the unforgiven portion prior to the maturity date. The Bank will notify you of the amount that is not forgiven and the due dates and amounts of your monthly payments required to repay the loan over the remaining term of your loan.
If your loan is not fully forgiven, CBT will contact you with additional details on the terms of repayment of your unforgiven loan amount at the time the SBA renders their decision.
The SBA will reduce your maximum Forgiveness amount by your EIDL advance of up to $10,000. If the SBA deducts the EIDL advance amount, you’re responsible for repaying that, in addition to any part of your PPP loan that is not forgiven. The Forgiveness application will ask if you received an EIDL advance.
Borrowers are required to retain all records pertaining to the PPP program for a minimum of 6 years after the loan is forgiven or repaid. In addition, Borrowers must permit authorized representatives of the SBA, including its Office of Inspector General to access the files upon request.
Loan Forgiveness Application & Documentation
There are two forms of application – the 3508 and the 3508EZ. Sole proprietors, independent contractors, and self-employed individuals who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form automatically qualify to use the Loan Forgiveness Application Form 3508EZ. All other Borrower types will need to review the 3508EZ instructions to determine if they qualify to use that application.
- The covered period starts on the PPP Loan Disbursement Date.
- The 8-week covered period ends 56 days later
- The 24-week period ends 168 days later.
- The Alternative payroll covered period begins 8-weeks (56 days) or 24-weeks (168 days) from the first day of the first payroll cycle following the PPP loan disbursement date
Note 1: PPP Loans made after June 4 are required to use the 24-week period.
Note 2: The covered period cannot extend beyond December 31, 2020. As such, all PPP applications with Disbursement Dates after July 16, 2020 will have a covered period end date of December 31, 2020.
No. Borrowers who received their PPP loan prior to or on June 5, 2020 can elect either the 8-week or the 24-week period at the time they submit their application for forgiveness. Borrowers who received funds after June 5 are required to use the 24-week period.
The basis of the forgiveness calculation is the Borrower’s ability to demonstrate that they made qualified expenditures within a maximum of 24-weeks of the PPP loan funding date. Before you choose the 8-week period, you should consider if that period contains adequate expenses to optimize your forgiveness eligibility. If it doesn’t, you should consider electing the 24-week period.
I chose the 8 week covered period which has now ended and I still have unused funds. Can I still select the 8-week period?
Theoretically, yes. However, since you can only seek forgiveness for eligible expenses paid or incurred during the covered period (8-weeks or 24-weeks) you would only be eligible for partial forgiveness and would have to repay the unspent funds. Alternatively, you could select the 24-week covered period, use the unspent funds for eligible costs and seek full forgiveness at the end of the 24-weeks.
If I choose the 24-week period and use all of my PPP funds on eligible expenses before the end of the 24-weeks, do I have to wait until the end of the 24-week period to file my application for forgiveness?
No. Borrowers that have used all of their PPP loan proceeds can apply for forgiveness at any time. Per SBA’s Interim Final Rule, Borrowers are allowed to select a Reference Period whose end-date coincides with the date they spent 100% of the PPP loan proceeds.
If I meet the requirement that 60% of the PPP loan be used for payroll expenses, but do not use the remaining money on eligible expenses will I receive 100% forgiveness?
No. In your application you certified that PPP funds would only be used for PPP eligible expenses and agreed as follows; “I understand that if the funds are knowingly used for unauthorized purposes, the federal government may hold me legally liable, such as for charges of fraud.”
Possibly. The first 25% reduction on a per- employee basis is exempt. However, SBA’s PPP forgiveness amount will be reduced by the aggregate amount of wage reductions in excess of 25%, on a per-employee basis over the Covered Period.
Note: A Safe Harbor provision allows Borrowers that eliminate wage reductions on or before December 31, 2020 to avoid a reduction in forgiveness. To qualify, Borrowers need to delay their application date until such time as they can document that the wage reduction has been eliminated.
If I reduced the number of full-time equivalent employees that I employ, will the amount of my forgiveness be reduced?
Possibly. However, the SBA has provided several safe harbors that could potentially eliminate any forgiveness reduction based upon a company failing to maintain FTE’s. These include but are not limited to the following:
- The Borrower brings its number of FTE’s back to normal by December 31, 2020.
- The Borrower documents its efforts to rehire specific individuals who turn-down the offer of re-employment.
- The Borrower can certify in good faith that their reduction in business activity, and thus employee levels, stems directly, or indirectly from compliance with Covid requirements or guidance.
The PPP allows loan forgiveness for payroll costs, including salary, wages, and tips for up to $100,000 annualized per employee, or $15,385 per individual over the 8-week covered period or $46,154 per individual over the 24-week period.
The maximum amount of owner comp that can be included is determined by a number of factors, summarized as follows:
- Owner-employed and self-employed individuals: The cap applies in total for all businesses in which you have an ownership stake. If you are eligible for and use the 8-week Covered Period, the cap is $15,385. If you use the 24-week Covered Period, the cap is $20,833.
- For self-employed individuals filing Schedule C or Schedule F, including sole proprietors, self-employed individuals and independent contractors, the cap is 2.5/12 of 2019 net profit as reported on Schedule C of your Federal tax return. Payments for health insurance, retirement, or state or local taxes are not eligible for loan forgiveness because health insurance and retirement expenses are paid out of net self-employment income.
- For general partners, the cap is 2.5/12 of your 2019 net earnings from self-employment that is subject to self-employment tax, as computed from 2019 IRS Form 1065 Schedule K-1 box 14a (reduced by certain expense deductions and unreimbursed partnership expenses) and multiplied by 0.9235. The compensation must have been paid during the Covered Period to be eligible for forgiveness. Payments for health insurance, retirement and state or local taxes are not eligible for forgiveness.
- For C-Corporations and S-Corporation owner-employees with a 5% or larger interest in the corporation, an owner who is also an employee may obtain loan forgiveness of:
- up to 2.5/12 of the owner-employee's 2019 employee cash compensation;
- payments for employer state and local taxes assessed on compensation;
- employer contributions to the employer retirement plans capped at 2.5/12 of the 2019 employer retirement contribution;
- C-Corporation owner-employees and S-Corporation owner employees with less than a 5% stake in the business, employer contributions for employee health insurance
Yes, with the following limitations:
- The lease and the mortgage were executed prior to February 15, 2020; AND
- The amount must be limited to amount of mortgage interest owed on the property during the Covered Period.
CBT Forgiveness Application Process & Portal Information
To provide our clients with the best possible experience, CBT has decided to automate its PPP forgiveness process. We are staging our application intake and will contact you when we are ready to accept your forgiveness application.
- You will receive an invitation e-mail from your Forgiveness Representative, who will work with you throughout the entire forgiveness process.
- With your invitation e-mail, you will receive details on CBT Online Portal access, a Forgiveness Application Readiness Checklist, and a Document Reference Guide to assist you with the application process.
- When you have completed the Forgiveness Readiness Checklist, you will e-mail it to your Forgiveness Representative to notify them that you are ready to apply.
- You will proceed with your application through the online portal.
- If the Bank has questions or needs additional information, we will return your application to you through the online portal with details on what is required to resubmit.
- You will be able to track the status of your application and all communications through the online portal.
- When you’ve met all of the requirements of the application, the Bank will submit it to the SBA. The SBA has 90 days to make a decision.
- CBT will notify you by e-mail of the SBA’s decision.
- If your loan is not fully forgiven, CBT will provide you with additional details about next steps at that time.
No. All applications must be submitted through the online portal.
- Review the access instructions to ensure all steps were followed
- Check/switch your browser – the portal does not function well with Internet Explorer
- Check your business legal name – you MUST enter the exact Business Legal Name as provided on your Forgiveness Application Readiness Checklist.
- If the above steps are unsuccessful, contact your Forgiveness Representative for assistance.
Yes, you can add one additional user.
To add a user, enter their email address to the “Additional OTP Email” (One Time Passcode). The additional user will then receive a token to login.
There are two components to the application requirements – entering information on the application and uploading supporting documents. Some application information will be prefilled but you must complete all steps and provide all documentation before your application will be accepted for review.
Before you begin your application, we recommend that you take the following steps to prepare:
1. Review the SBA application and instructions - link below
- 3508EZ (Short) Form: Click Here for 3508EZ (Short) Form Application | Click Here for 3508EZ (Short) Form Instruction
- 3508 (Long) Form: Click Here for 3508 (Long) Form Application | Click Here for 3508 (Long) Form Instructions
2. Review the applicable Supporting Document Guide found in our Quick Links section of our PPP page.
- Knowledge Center Use the portal’s comprehensive guide to the forgiveness process. To access it, use the “Knowledge Center” button on the left side of the screen.
- Uploading Documents We recommend you upload supporting documents individually to avoid an error due to size limitations. Use our “Portal File Name Guide” supplied with your invitation to apply. This provides instructions on how to name your documents when you upload them with your application, which will assist in efficiently processing your application. Failure to accurately identify your supporting documents may slow down your application process at the Bank and/or the SBA.
- Session Time-Out After 15 minutes of inactivity, your session will time out and you will need to log back in. You will receive a pop-up to extend your session at 10 minutes.
- Saving Your Data We recommend saving your work on each page before proceeding to the next page. If you wish to exit the portal before you are ready to submit your application, you MUST complete the Borrower certifications in order for your work to be saved.
- Communication With The Bank On Your Loan Application Once you have started the application process, all communication with your Forgiveness Representative will be e-mail via the portal.
E-mails from the portal will come from: ESFSCMConfigurator@Fiserv.com