Paycheck Protection Program Loan Forgiveness – Round 1
At WSFS Bank, we remain committed to helping our Customers navigate the requirements for their Paycheck Protection Program (PPP) loan. Recently, the U.S. Small Business Administration (SBA) provided guidance for the PPP Loan Forgiveness program, and these initial details are below.
Please note this guidance may change – we will provide additional details as they are released by the SBA.
Important Update on PPP Loan Forgiveness
Please check this page for updates to SBA rules and guidance, a modified borrower application form, and a modified loan forgiveness application when they are released by SBA.
The modifications to PPP loan forgiveness include:
- Reducing the amount of the loan needed to be spent on payroll from 75% to 60%, thus increasing the amount of funds available for other expenses from 25% to 40%
- Extending the minimum maturity of PPP loans to five years
- Extending the covered period for using PPP loan proceeds from June 30, 2020, to Dec. 31, 2020
- Extending the covered period for PPP loan forgiveness from 8 weeks from the date of origination to 24 weeks from the origination date
- Borrowers who have already received PPP loans retain the option to use an eight-week covered period
- Extending the deadline for the rehire exception from June 30, 2020, to Dec. 31, 2020
- The amount of loan forgiveness will not be reduced by a reduction in the number of full-time equivalent employees, if, with respect to the period February 15, 2020, to December 31, 2020, the borrower is able to document in good faith (A) an inability to rehire employees who had been employed on February 15, 2020, and an inability to hire similarly qualified employees for unfilled positions by December 31, 2020, or (B) an inability to return to the same level of business activity at which the borrower was operating before February 15, 2020, due to compliance with federal governmental requirements or guidance set forth between March 1, 2020, and December 31, 2020, relating to standards of sanitation, social distancing, or other worker or customer safety requirements due to COVID‑19
- The most recent bill revises the deferral period allowing recipients to defer payments until they receive compensation for forgiven amounts. This can be up to 10 months
- The bill extends the covered period to 24 weeks, meaning the maximum forgivable salary amount would be $46,153 ($100,000/52 X 24).
Please visit the SBA website for additional PPP loan forgiveness details.
Applying for PPP Loan Forgiveness
WSFS Bank is now accepting forgiveness applications for the Paycheck Protection Program (PPP). We have partnered with BDO USA, LLP to process loan forgiveness.
You will need the following information to register and begin using the portal:
- SBA Loan Number or Lender Loan Number
- Covered Loan Amount
- EIN or the last four digits of your Social Security Number
This information is found in the note you signed via DocuSign for your CARES Act PPP Loan.
You will receive an email from us on how to register. If you did not receive an email, or if you have trouble registering, please contact BDO at PPPSupport-WSFS@support.bdo.com. For more information on forgiveness from the SBA, please click here.
For detailed registration instructions or to add a delegate (accountant or other person submitting your forgiveness application), please click here.
In addition, here are two videos to help you get started and understand what to expect during the forgiveness process.
Per current SBA guidelines, WSFS has 60 days to submit the application once completed by you to the SBA and the SBA has 90 days to review it and reach a decision on forgiveness. We will notify you by email of status changes to the application.
Please note: for all PPP Loans originated with us after June 30, 2020, a registration email was sent in early September.
Preparing to Apply for PPP Loan Forgiveness
Determine which forgiveness application you need and when:
- Review SBA FAQs for Forms 3508, 3508-EZ and 3508S, and determine which PPP forgiveness application form to use
- Select PPP forgiveness application you should use: Form 3508, 3508-EZ or 3508S
- Determine when you should file your application: After 8-weeks or 24-weeks (“Covered Period” for forgiveness).
Collect the documents you will likely need:
- Payroll reports for your “Covered Period”
- Health insurance premiums or costs paid for self-insured plans
- Employer 401(k)/pension contributions
- State/local unemployment insurance premiums during the Covered Period
- Compensation, subject to the limited amounts, to all owner-employees, self-employed individuals and general partners whose compensation must be included on line 9 of Schedule A of Form 3508
- Payments of Rent on real property or personal property for the Covered Period
- Payments of Interest on mortgages for the Covered Period
- Payments of Utilities for the Covered Period
- Calculate your Loan Forgiveness using the Schedule A worksheet
- For Form 3508-EZ or 3508S filers, you can go directly to Form 3508-EZ or 3508S
- For Form 3508 filers, you will need to begin with the Schedule A worksheet.
Forgiveness Application Guidance – FTE, Payroll and Non-payroll Documentation
Full Time Employees (FTE)
If you are using Form 3508 EZ and are attesting that:
- You did not reduce annual salary or wages by more than 25% during the Covered Period compared to the period between January 1, 2020 and March 31, 2020 and;
- You did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period, then;
Covered Period, or when you submitted the application, if sooner.
- Please provide at least one Form 941
- If you do not use a third-party payroll provider, please provide evidence of the payroll amounts being paid (i.e. bank statements or canceled checks)
- If you are a Sole Proprietor, please provide a copy of Schedule C filed for 2019
- If you are a Partner in a partnership or LLC, please provide a copy of each Schedule K-1(s) filed for 2019
- If you are submitting health insurance payments or contributions to employee retirement plans, please indicate what portion is employer paid vs. employee paid. The portion that is paid by an employee is not eligible because it is included in their payroll
- Remember that employer taxes (i.e. FICA, FUTA, etc.) are not eligible for forgiveness. If you are including Employer State and Local taxes assessed on employee wages such as unemployment taxes, please provide the State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.
- According to new SBA guidance released on August 24, 2020 rent payments made to a related party who owns the property are limited to the allocable interest on the underlying mortgage. If there is no mortgage, no forgiveness is allowed for related party rent payments (unless the related party is passing the rent on to an unrelated landlord)
- If you are submitting amounts for utilities or rent, please provide evidence (invoices for utilities or a rental/lease agreement) of the obligation as of February 15, 2020 and evidence that the payments were made. For utilities, the previous month’s payment may be listed on the invoice as evidence. If not listed, please provide bank statements or canceled checks.
If we require additional information or have questions during the application process, we may reach out to you via email or phone. Please ensure the best contact information available is included when submitting your forgiveness application.
Please visit the SBA website for additional PPP loan forgiveness details.