PPP Loan Forgiveness Update
As of October 9, 2020
Thank you for your continued patience as we awaited updated procedures from the SBA on the PPP Loan Program. Please read below for updated information regarding the PPP Loan “Forgiveness” application process.
Borrowers who received $50,000 or less in PPP funding:
The SBA has released a streamlined loan forgiveness application for Paycheck Protection Program loans totaling $50,000 or less. Washington Trust is in the process of modifying our secure online application portal to make this more simplified form available to our customers. We will send you an email with a secure link to the portal you as soon as we are ready to accept applications.
Borrowers who received loans of more than $50,000 in PPP funding:
Washington Trust has started to send emails to borrowers who received Paycheck Protection Program (PPP) loans through the Small Business Administration (SBA) and are now eligible to apply for “forgiveness” of their PPP loan. The email contains a link to a custom site where the borrower can securely complete the PPP Forgiveness application online.
Due to the tremendous number of borrowers we assisted with PPP funding, we are sending the email to “groups” of borrowers. If you haven’t received an email from us yet, we encourage you to continue to wait. We want to work closely with each borrower to ensure they receive the personal attention and support they need to thoroughly complete their application and receive forgiveness as quickly as possible.
Frequently Asked Questions
We encourage you to review our FAQs below on how to prepare for completing the forgiveness applications.
If the PPP Forgiveness application for loan less than $50,000 is being simplified, do I still need to keep my documentation?
At this time, the SBA still requires full documentation. We will let you know if there are any changes to the requirements.
When can I apply for forgiveness?
Washington Trust will send you an email with a secure link to our online PPP forgiveness portal. Until you receive the email and link from Washington Trust, we recommend you do not complete the PDF application on the SBA's website, nor should you respond to any other requests to apply for forgiveness, as they could be fraudulent. As your PPP lender, Washington Trust is the only one that can process your forgiveness application.
There is no immediacy to applying for Forgiveness, as you have 10 months from the last day of your covered period to apply.
When do I have to make a PPP loan payment?
Your PPP loan payment will not be due until after you apply for Forgiveness. Once you apply for Forgiveness and your application is accepted by the SBA, we will inform you when the SBA renders a decision. If all, or a portion of the loan is not forgiven, we will inform you of when your first PPP loan payment is due.
If you don’t apply for loan forgiveness within 10 months after the last day of the covered period, then your PPP loan would no longer be considered “deferred” and you would be required to begin paying principal and interest on the PPP loan. We value our relationship with you and want to ensure that the PPP forgiveness process is as easy and convenient as possible.
How will the forgiveness application process work?
Our email link will take you to a secure online portal that will walk you through the process and make it clear what documentation is required.
- After you have submitted your application via this portal, we will work with you to ensure it is complete.
- Once your application is complete, we will finalize our review and transmit the application to the SBA.
Please note that SBA rules allow us 60 days, from the receipt of a completed application, to transmit it to the SBA. The SBA then has 90 days to complete its processing. While these are the formal “not to exceed” timelines, we will seek to handle applications more expeditiously, as will the SBA. However, this is a wholly unique process so it is best to assume it will take some time to navigate through it.
What documents do I need to prepare for the forgiveness application?
Below are links to the required documents needed to apply for forgiveness. These documents must be uploaded to the forgiveness application portal before you can submit your forgiveness application. There are documents that are required for applying, AND a list of documents that should be retained after your application has been submitted.
The SBA set the proportion of PPP funding that must be used on payroll cost to qualify for full forgiveness at 60%. This means to qualify for full loan forgiveness, you must use at least 60% of your loan funds for eligible payroll costs. You can use up to 40% of your loan funds for eligible non–payroll costs. To prepare for loan forgiveness, it’s important to track and retain all documentation to support payments made with your PPP loan funds. To prepare for loan forgiveness, it’s important to track and retain all documentation to support payments made with your PPP loan funds.
Is there anything I can do before I receive my application link?
For loans more than $50,000, there are a few things you can do to prepare for the application process:
- Determine your EZ Form eligibility - it’s much easier to use than the long form, so we recommend you do this! The SBA introduced a new EZ PPP loan forgiveness application which requires fewer calculations and less documentation, making it easier for certain borrowers. Our online application will offer both the long form and the EZ application.
- Review the application instructions. These instructions will guide you through the application process.
- Review the list of required documents. There are documents that are required for applying, and a list of documents that should be retained after your application has been submitted.
- Choose between the 8 or 24-week “covered period”. The SBA recently expanded the “covered period”, or the period during which PPP borrowers can spend the funds on eligible expenses and still qualify for loan forgiveness, from 8 weeks to 24 weeks. The 24-week period applies to all loans made on or after June 5. If you received your PPP loan before June 5, you can choose between the original 8-week covered period or the new 24-week covered period. You may apply for loan forgiveness any time on or before the end of the covered period. You may wish to consult with your accountant to determine the best time frame for your business.
Our Washington Trust team is always available to answer your questions; please contact your loan officer, local branch, or call our Customer Solutions Center at 800-475-2265, if we can be of assistance.