Please review this information in its entirety before attempting to apply for forgiveness for your Small Business Administration (SBA) Paycheck Protection Program (PPP) loan.

TAX/ACCOUNTING ADVICE

FirstBank is providing this information to outline the steps and process to apply for PPP loan forgiveness. This information should not be construed as tax or legal advice. You should consult with your CPA, tax advisor, financial advisor or attorney for tax and legal guidance related to your specific circumstances.

FIRSTBANK PROCESS

We will be using an online portal for the forgiveness application process, similar to what was used for the initial loan application. Due to the significant number of PPP loans processed and to provide a timely response to your application, we will be inviting groups of customers to apply for forgiveness, on a staggered basis, between October of 2020 and March of 2021. Borrowers will receive an email with instructions on how to log into the portal once we are ready for them to apply as well as an advanced email two weeks prior to when they will be able to apply. When this advanced notice is received we ask that borrowers complete Steps 1-3, as described below, so that you are prepared to apply when the invitation email is received. The emails will be sent to the same individual who received final loan documents to sign when applying for the loan.

The SBA released updated guidance related to loan forgiveness on October 8th, 2020 for borrowers with loan amounts of $50,000 and below.  These changes will simplify the method in which the forgiveness amount is calculated, will increase your forgiveness amount in certain situations, and for many of our customers, will greatly reduce the amount of documentation that must be provided as part of the application for loan forgiveness.  We are working with the SBA to integrate these changes into our online portal.  Until that time we will begin processing forgiveness applications for borrowers with loan amounts above this threshold.

It is important to remember that payments on PPP loans will be deferred until any of the following three events occur:

  1. Forgiveness payment is received
  2. It is determined through the application process that you are not eligible for forgiveness
  3. Ten (10) months have passed since the end of the covered period 

In preparing to apply for PPP loan forgiveness, we encourage you to review the information below in its entirety before applying for forgiveness.



Step 1 – Determine the Appropriate SBA Application Form

There are three methods of determining the amount of loan forgiveness that you are eligible for:

  1. Application Form 3508S for loan amounts of $50,000 and below. This form eliminated the more detailed calculations required for larger loans.
  2. Simplified calculation Form 3508EZ. This form is for loans over $50,000 but retains simplified calculations for borrowers that meet certain criteria.
  3. Traditional Form 3508

To determine which application form is appropriate for your business please review FirstBank’s loan forgiveness application guidelines.

Step 2 – Determine Forgivable Expenses and Gather All Supporting Documentation

To begin calculating the forgiveness amount you are eligible for you should first gather all supporting documentation for costs which will be included in your forgiveness amount calculation. Details regarding what is considered appropriate supporting documentation, based on your business type, can be found by clicking the following links for Form 3508S & Form 3508EZ and for Form 3508.

As part of the application process, you will be required to provide the supporting documentation for the expenses included in your calculated forgiveness amount. Please note, while the application forms do request your FirstBank and PPP loan numbers, these numbers will be populated for you in our application portal.

Additionally, for some borrowers, there will be documentation that must be gathered to calculate the forgiveness amount which will not be submitted with your application unless requested at a later time. Regardless of whether the documentation is required to be submitted, current SBA guidance states that all supporting documentation, whether submitted with the application or not, must be maintained for six (6) years after the loan is forgiven or repaid in full, and must be made available to the SBA and its representatives upon request. Please discuss this with your CPA, tax advisor, financial advisor or attorney.

Step 3 – Complete Forgiveness Amount Calculations

The SBA has provided additional guidance for calculating the forgiveness amounts in their instruction documents for forms 3508S, 3508EZ and 3508, and in their Loan Forgiveness FAQ. These documents should be used in tandem with the application forms when calculating the forgiveness amount. 

FirstBank has also provided general guidelines for Form 3508 calculations which assist with the appropriate order of operations in completing the more complex form. Given the complexity and variability of situations across different business types, we highly recommend borrowers consult with their CPA, tax advisor, financial advisor or attorney to determine the appropriate amounts. 

Step 4 – Apply Through FirstBank Forgiveness Portal

Once you have completed the appropriate forgiveness application form you will be ready to enter the information into FirstBank’s portal. 

Due to changes made during the loan application process some borrowers will be required to establish a new username and password. If this is applicable to you, you will receive instructions for the creation of the login credentials when you receive the invitation to apply for forgiveness.  

When entering figures into the portal you will be asked to make decisions related to any potential unforgiven amount of your loan. Unforgiven amounts must be repaid by the borrower. FirstBank is requiring that these payments be made through monthly automatic account deductions from a FirstBank deposit account. You should have the account number available for the account that should be debited for the payments.

For loans originated prior to June 5, 2020, the original promissory note defines that this residual balance will be repaid over the remaining term of the two year loan. Pursuant to the terms of the Paycheck Protection Program Flexibility Act, the remaining balance on the loan may be amortized over a five year term if both the borrower and the lender agree to this modification. FirstBank will allow the loan term to be extended to five years if the unforgiven loan balance is greater than $5,000.

After entering all figures into the portal you will be required to upload all supporting documentation previously described. It is critical that all required documentation is uploaded at the time you apply. If FirstBank must request any missing documentation from you after an initial review of your application it will restart the timeline for receiving a decision on your forgiveness application.

Step 5 – Electronically Sign Application Form and Residual Balances

After FirstBank has reviewed your application for loan forgiveness, and has determined the appropriate documentation has been received, you will be asked to electronically sign the application form. This will be done by following the instructions contained within an email received from DocuSign, similar to how the initial loan application and loan documents were signed. 

In additional to signing the forgiveness application, you will be asked to sign an automatic payment authorization and a loan term modification if applicable to your loan.

Once the signed documentation has been received, FirstBank will submit the information to the SBA for its final review. We anticipate it will take up to 150 days from the time you apply before the forgiveness decision will be finalized and the payment will be received from the SBA. 

For any additional questions or assistance please contact us by emailing SBAPPPCustomerService@efirstbank.com or calling us at 1-833-940-2562 or 720-974-8654

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