Tips for Requesting Paycheck Protection Program (PPP) Loan Forgiveness – 2021

Tips for Requesting Paycheck Protection Program (PPP) Loan Forgiveness – 2021

(music playing) [DIEDRA PORCHÈ]: Thanks for joining us today. I’m Diedra Porchè, a Managing
Director for Business Banking helping to serve
clients just like you. Our Chase Chats are open
conversations about money and how to help you make
the most of yours. On behalf of my many colleagues
who work with small businesses, I am pleased to present this
Chase Chats Webcast on Loan Forgiveness for the 2021
Paycheck Protection Program.

We’ll talk about key factors
that are the same from the 2020 program as well as those that
are different this year. We put this session together to
help you understand some of the key points of the Loan
Forgiveness rules for the Snall Business Administration and to guide you through our request process. We recommend that you watch this
whole webcast before requesting Forgiveness. One point I really want to
stress: please be prepared as possible before you
start your request. When you’re fully prepared, it
should take you less than an hour to complete the request.

As you progress
through the request, you can stop and save your work
at the bottom of each page. Also, a reminder,
this is a U.S. SBA program that participating
lenders facilitate on behalf of the SBA. All loans are subject to
requirements of the SBA program. Please review the latest program
details at SBA.gov or Treasury.gov. So here’s what we'll cover in
today’s webcast. Forgiveness Basics. Program Updates.
How to Prepare, which includes: What pre-work will be involved,
what info we will pre-fill, and documents to have handy. We'll cover the request process,
and we'll dive into the request and walk you through each of the
three SBA Forgiveness Forms. Now, Forgiveness Basics. I want to remind you
that whether you received PPP funding in 2020 or 2021, you can
request Loan Forgiveness through your lender, when
they are ready, who will send it onto
the SBA for decision.

If the SBA approves
your request, you won’t have to pay back the
forgiven portion of your loan. Of course, Forgiveness is
neither automatic, nor guaranteed. As I said, preparing to request
Forgiveness is crucial, and you start by documenting how
you spent your loan funds. You have until your loan maturity
date to request Forgiveness. You generally won’t have to
start making any loan payments until 10 months after the max
24-week covered period ends. If you request Forgiveness
during this deferral period, you won’t have to start making
payments on unforgiven amounts until the SBA provides a
decision on your request or remits funds. Now, Program Updates. So, let me highlight where we are
on key factors for Forgiveness. To receive full Forgiveness, you must use at least 60% of
your loan proceeds for eligible payroll costs, and no more than
40% on eligible non-payroll costs; otherwise, you may only
be eligible for “partial” Forgiveness If you have a PPP
loan from 2020 and one from 2021, you must request Forgiveness
separately for each loan.

For a 2021 loan of
$150,000 or more, you must: Request Forgiveness at
the same time for both the 2020 and 2021 loans, or,
Request Forgiveness in this order: Step 1: Request Forgiveness on your
2020 PPP loan, even if you are requesting $0 of Forgiveness. Step 2: Request Forgiveness for
your 2021 PPP loans. There are three SBA Forgiveness Request Forms. Form 3508S is for PPP loans
of $150,000 or less. Most of you will use this form. Note: for the 3508S, you don't
need documentation for your 2020 PPP loan. However, if you're requesting
Forgiveness on your 2021 loan, you must provide documentation that
shows you had at least a 25% reduction in gross receipts.

Form 3508EZ is for PPP loans over $150,000 for businesses that meet certain qualifications. Form 3508, use this if you have a loan that cannot use form 3508S or 3508EZ. The Covered Period is now more flexible. It is the time period for which to
use your PPP loan funds on eligible costs. It starts the day your loan
funds were deposited into your Chase Business checking
account, and ends at the minimum eight weeks, or the
maximum of 24 weeks. You choose the exact date. If you got PPP loans
in 2020 and 2021, your Covered Period for your first and
second loan cannot overlap. Note: there is no longer an alternative
payroll Covered Period for 2021 loans. If you request Forgiveness within
the deferral period, ten months after the maximum
24 week Covered Period, you will need to start making payments
once the SBA makes a decision on your request and
remits any payment.

If you request Forgiveness after
the deferral period, which is ten months after the maximum
24 week Covered Period, or if you don't request
Forgiveness at all, you will have to start making payments
on your loan balance about fifteen months after your loan
was dispersed. For example: For first PPP loans dispersed in
April 2020, no payments are due before July 2021. Remember, you have until the
maturity date of your loan, to request Forgiveness. If your loan is $50,000 or less,
you are exempt from any full-time equivalency,
or FTE, reductions. However, you will need to calculate
your FTE reduction and verify if you meet Safe Harbor
qualifications. If your loan is less than $50,000, but
together with your Affiliates, if applicable received PPP
Loans of $2 Million or more for either your first or
second PPP loan.

If your loan is more
than $50,000, or if your 2021 PPP loan
was $2 million or more. You can find specifics on how to
calculate these reductions on page 4 of Form 3508 Instructions
for PPP Schedule A. Rent, Utilities, and Mortgage
Interest have been eligible non-payroll expenses
for agreements established before
February 15, 2020. Now, the SBA has added four
more categories you can include in your Forgiveness request. Covered Operations Expenditures. Covered Property Damage
Costs during 2020 not covered by insurance. Covered Supplier Costs. And, Covered Worker
Protection Expenditures. They also expanded payroll costs
to include employer paid group health, life, disability,
vision, and dental insurance, including employer contributions
to a self-insured, employer-sponsored,
group health plan. I hope that you found these
highlights helpful in getting ready to request
Forgiveness. Of course, there are
some exceptions. As always, for full program details, visit SBA.gov/ppp and Treasury.gov. Now, How to Prepare. We know you may still have questions – so we’ve created some additional
resources to help you prepare. In particular, you should review the
pre-request checklist on our website. The checklist walks you through steps
you need to complete and items to consider when
calculating your Forgiveness amount. And all that preparation
should really pay off.

Once you’ve done all that,
we believe it should take you less than an hour to complete
the online Forgiveness request. Also, you may want to contact your
accountant, attorney, or other trusted advisors before
requesting Forgiveness. It’s your obligation, as the borrower,
to understand the SBA’s rules. Other eligibility requirements may apply. Please visit SBA.gov or Treasury.gov
for any updates. Now, onto the Request Process. Let’s dive into the actual submission. Here my goal is to give you an overview,
so you’ll know what to expect. I’m going to walk you through
all seven sections of our Loan Forgiveness request for
2020 and 2021 PPP loans.

I’ll try to address common questions along the way. But here are some important logistics: You must be an authorized representative
on your account to submit a Forgiveness request. Also, use a laptop or desktop computer. You can’t submit a Forgiveness
request using a mobile device. Have only one chase.com browser window
session open while completing your request, or you
may lose all of your work and have to
restart your request. Save your progress on your request
every time you complete a page by choosing “Next”. Be sure to sign in to the chase.com account
that is associated with the business that is requesting
Loan Forgiveness. (music playing) Now, Choose Your Business. In this section, you answer questions
about your business. We’ll ask if this is your first
or second PPP loan because there a few key differences. Remember: If you received a 2020 and
a 2021 PPP loan, and your second loan is more than $150,000,
you should: Request Forgiveness at the
same time for both loans or, Request Forgiveness
in this order: Step 1: Request Forgiveness
on your first PPP loan – even if you are requesting
$0 Forgiveness.

And then Step 2: Request Forgiveness
for your second PPP loan. (music playing) Now, determine which SBA form
the business can use to complete the request. We're gonna review the criteria
on which SBA Form to use, depending on your loan amount. If your loan amount is $150,000 or less,
you can use SBA Form 3508S. You have to do fewer calculations
and provide less documentation. You can use SBA Form 3508EZ if your
loan is more than $150,000 and you can check
one of these two boxes: You can check Box #1 – If you didn’t:
Reduce annual salary or hourly wages of any employee
by more than 25% during the Covered Period compared to
the most recent full quarter before the Covered Period, and, You didn’t reduce the number of
employees or the average paid hours of employees between January 1, 2020
and the end of the Covered Period. Now, you can check box #2 – If you didn’t: Reduce annual salary or hourly wages
of any employee by more than 25% during the Covered Period compared to
the most recent full quarter before the Covered Period, and, You were unable to operate your business
during the Covered Period at the same level of business activity
as before February 15, 2020 due to compliance with COVID-19
government requirements or guidance.

Business Banking

Generally, these requirements refer to
requirements or guidance set between March 1
and December 31, 2020 by the Secretary of Health
and Human Services, the Director of the Centers for
Disease Control and Prevention, or the Occupational Safety
and Health Administration, related to the maintenance
of standards of sanitation, social distancing, or any other work
or customer safety requirements related to COVID-19. If your loan is more than $150,000 and
you can’t check box #1 or #2 on Form 3508EZ, you can
use SBA Form 3508. (music playing) Now, let's review your Business
and Payroll Information. We'll review the pre-filled information
for your business and payroll information
for accuracy. Check your business
and PPP loan information. Here, you’ll need to confirm
your business information, including: Business Legal Name Email Address Primary Contact Business Phone Number DBA or Tradename Business Address Business Tax Identification Number (TIN) and NAICS (business activity) code You’ll need to confirm your
PPP Loan Information, including: First or Second PPP Loan SBA PPP Loan Number Chase PPP Loan Number PPP Loan Amount and PPP Loan Disbursement Date.

After the pre-filled section, you’ll need to
provide some important information about your payroll costs. Now, this is likely to be a difficult part of the application. That’s why we really
want you to prepare this material before signing
in to request Forgiveness. We’ll enter your Covered Period
start date – the date loan funds
were deposited into your Chase Business
checking account. You’ll need to provide your
Covered Period end date. This can be the date you choose
that is at least 8 weeks after loan disbursement but no
more than 24 weeks after. Enter the number of employees
you had at the time you applied for your loan and at the time you
submit your Forgiveness request. Tell us if you — together with your
Affiliates, if Applicable — received PPP Loans of $2 Million
or more for either your first or second PPP loan by checking
the box on your submission.

If you did, you will need to include
any reductions to FTE or salary/wages in your
forgiveness calculation. Next, you need to enter your eligible costs
to calculate your potential Forgiveness amount. The requirements for this are different
based on the form you use and your loan amount. Keep in mind that if your loan is
more than $50,000 and your payroll costs are less than 60% of
your requested Forgiveness amount, you may need to adjust your Forgiveness
amount for any reductions in FTE employees or employee salary/wages
– no matter what form you use. If using Form 3508S: If you had a second PPP loan
less than $150,000, we’ll ask you to tell us your
gross receipts amount, and you’ll need to provide supporting
documentation showing your business had at least a 25%
reduction in gross receipts later on.

If your loan is more than $50,000,
you may need to adjust your Forgiveness amount for any
reductions in FTE employees or employee salary/wages. You’ll enter your payroll costs to
calculate your Forgiveness amount. The payroll costs you enter must
be at least 60% of your requested Forgiveness amount. If it is not, we will ask you to update
the payroll amount above or the Forgiveness amount below. If using Form 3508EZ: Enter your payroll costs following the
3508EZ instructions Which include: Eligible payroll costs Cash compensation Employee benefits Owner compensation. Enter your non-payroll eligible costs. But note: If you enter payroll costs that
are equal to or more than your loan amount, you can request
Forgiveness for the full PPP loan amount without entering
your non-payroll costs. Review your potential Forgiveness
amounts which will be calculated for you – your payroll and non-payroll
costs, your PPP loan amount, and your payroll cost
60% requirement. The lowest of these 3 costs
will be your requested Forgiveness amount. If using Form 3508,
there are more fields to fill-out: Use the PPP Schedule A to determine
your total payroll costs and your total FTE reductions,
if these apply to you.

For payroll, you’ll include
Tables 1 & 2 on the SBA Schedule A worksheet, as well as your non-cash
compensation payroll costs, employee benefits, and
compensation to owners. You’ll need to calculate your
FTE reduction (if any) and see if you qualify for Safe Harbor 1 or 2. Then, you’ll calculate your
non-payroll costs. In the last section, you’ll see
your payroll amount less FTE reductions, your PPP loan amount,
and your payroll costs 60% requirement– your Forgiveness amount will be the lowest of the three amounts. There are some important things to note: If the Forgiveness amount you’re
requesting is less than your loan amount and you believe you can
still use your remaining loan funds on eligible expenses, you may want
to save your request and wait to submit at a later date. If you file for Forgiveness within
10 months after the end of the maximum 24-week Covered Period,
you won’t have to make payments on your loan until the SBA makes
a Forgiveness payment to the lender or refuses to make
a Forgiveness payment to the lender.

Now, listen, I know you’ve heard me say this
before, but it’s really important and so I want to repeat it: We recommend that you prepare
this information and gather supporting documentation before
logging in to request Forgiveness. Now, let’s go on to the next section. (music playing) Document Upload. The documents you provide in
this section will support the expenses you are submitting.
We recommend you keep all the documents you used for your
records, in case the SBA requests them. Remember: If you used Form 3508S and have
a second loan $150,000 or less, you must upload supporting
documentation that your business had at least a 25% reduction in gross receipts. You didn’t have to upload those
when you applied for the loan.

Uploading documents from a laptop
or desktop computer. Uploading from a phone
or tablet won’t work. For detailed information about which
documents you will need to upload, go to our forgiveness website. Please make sure to follow these
nitty-gritty file requirements when preparing and uploading your documents. You can also find these on our website. The files must: Be easy to read Have password protections removed Have names of no more than 40 characters Have names that don’t include special characters Be either PDF, JPEG, Excel or PNG Be 5 MB or smaller And not be a scan of a paper
PPP Loan Forgiveness request Let’s move on to the next section.

We’re almost done. (music playing) PPP Borrower Demographic Information Form Select YES or NO to tell us if you
want to provide demographic information about your owners and principals. It’s up to you if you want to provide it. It won’t have any impact on your loan Forgiveness. If you select YES, you’ll answer
basic questions about your owners and principals. If you select NO THANKS,
you’ll proceed to the final section of the request — (music playing) Certifications and Authorizations Alright, we’ve made it to
the last section of the request.

Please read each certification thoroughly
and check the box to to attest to each. As the person completing the request,
you are making the representations and certifications
on behalf of the Borrower. When ready, click “Submit to apply.” (music playing) Confirmation When you see this confirmation page,
you’ll know you submitted your Forgiveness request successfully. It will generally take us up to
60 days to review your request. Once we submit it to the SBA,
it may take up to 90 days for the SBA to review a complete request.

Actual times may vary
both for us and for the SBA. If we need more information
from you about your request, we’ll email you. You can download, print, and save
your completed Forgiveness request. You can also view your request
status online by clicking on the Application Status blue link. Listen, thanks for sticking with me today through the Forgiveness request. I hope you found our time together
today helpful as you prepare to submit your request.

Before we go, I want to remind you
that if you complete all the necessary pre-work, the Forgiveness request
process should take less than an hour. Keep visiting chase.com/loan-forgiveness for the latest updates and resources. All of us at Chase know how
important receiving Forgiveness on these loans are to
you and your business. We’re here for you. Thank you so much for your
business and have an excellent day. (music playing).

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