The latest information regarding PPP Loans and forgiveness procedure.
Hometown Bank is gearing up for this process and recognizes the urgency all of you are feeling at this moment. We once again, ask for your patience as we attempt to set this up in a manner that will provide the fewest obstacles to applying.
We are attempting to clarify some points about the next round, as well as provide updates to forgiveness procedures for R1 recipients, however due to the fluid nature of the updating process, please see the link below or contact us with any questions. Round 2 of PPP loans will start soon. The most recent news we have received is that applications for first-time applicants will commence Monday, January 11th, and for applicants who have received money in round one (R1) , Wednesday, January13th. While the government has announced this schedule, the SBA has yet to give final approval for the application to be used in R2 that we will describe as SBA Application 2483-SD. Our vendor (SPARK) is attempting to get the final version and incorporate it into its website for all applicants to access, but as of the writing of this memo, it is not yet available. In addition, there are different conditions to be eligible for R2, some key ones are listed as follows:
• R2 applications are not conditioned upon receiving forgiveness for R1 money. • R2 applicants can set the covered period between 8 weeks and 24 weeks.
• R2 loans will include additional expenses (speak with your accountant on this). • R2 loans provides greater flexibility for seasonal employees (speak with your accountant on this).
• R2 applicants will be required to submit financial information to demonstrate a revenue reduction of at least 25% from any comparative financial quarter from ’20 to ’19. Financial information could include, but is not limited to, your Business tax return for ’19; 941 records for the comparative quarter you designate; bank statements for the same period, or payroll records from your payroll provider. Please speak with your accountant on this matter to determine what is most appropriate for your business.
• Maximum single loan amounts are restricted to $2,000,000.00. Loan terms for R2 are basically the same as R1 loan terms, which includes, but is not limited to a 1% interest rate with a five year maturity. Our vendor is attempting to facilitate an online application process that should permit you to upload any supportable documents with your R2 application. Forgiveness process
• The new relief package approved at the end of December, did include the one page certification form. Like the R2 application, this SBA form has also not been finalized by the SBA. The moment it becomes available, our vendor, SPARK, will reach out so you may establish your account to commence this process. No supporting documentation for recipients of money below $150,000.00 will need to be provided as we have been communicating. Due to the time sensitivity of the rules and regulations, please check the SBA PPP Loan website (link below) for the latest updates.
What should you be doing?
Your accountant is a good source of information and should be helpful as you navigate the application or have additional questions about the program. You are also welcome to reach out to us with any questions you may not be able to answer yourselves. I have listed the names of our lending staff below for assistance: