Webinar Offers SBA Rural Update, Loan Forgiveness Insight

The Paycheck Protection Program (PPP), administered by the U.S. Small Business Administration (SBA), was launched to help small businesses maintain operations during the pandemic. When program applications closed on August 8, more than $525 billion in loans had been awarded. Now, SBA has opened a “forgiveness portal” to receive applications from PPP recipients seeking to have their loans forgiven.

Several members of the SBA staff, including Bill Briggs, deputy associate aministrator for the Office of Capital Access at SBA, joined CFC moderators in a recent webinar to provide an update on the PPP program, the Economic Injury Disaster Loan program and other initiatives providing relief to small businesses.

One initiative discussed during the webinar was SBA’s Office of Rural Affairs. Headquartered in Denver, Colorado, this office has provided COVID response to assist small businesses, increased access to lending programs and expanded export assistance and rural partnerships with USDA.

Watch the Special SBA Rural Update Webinar Replay

CFC members can watch a replay of the August 31 Extra Credit Education Series webinar, “Small Business Administration Offers Rural Update,” to get an introduction to the SBA Office of Rural Affairs, a synopsis of SBA programs to aid small businesses and guidance on applying for PPP loan forgiveness.

What to Consider When Deciding to Pursue SBA Loan Forgiveness

The primary focus of the webinar, however, was how SBA was handling applications for loan forgiveness through PPP. Jeffrey Bass, outreach and marketing specialist for SBA’s Office of Rural Affairs, provided an overview of potential considerations for PPP participants as they begin the process of submitting their applications for loan forgiveness.

Status of the Borrower:

• What financial shape is the business in?
• Are business conditions for the business improving, worsening or staying the same?
• Has the borrower maintained the salaries and wages for full-time employees (FTE)?

Status of the PPP Loan/Use of Proceeds:

•  Has the borrower used all the loan proceeds for which they will request forgiveness? 
• Has the borrower calculated their forgiveness amount?
  •     Eligible expenses
  • Safe harbor considerations
  • FTE and salary/wage reductions
• Is existing PPP program guidance sufficient for the borrower to feel comfortable to proceed?
• Is the lender ready to accept forgiveness applications?

Key Criteria Flagged by SBA for Forgiveness:

• FTE retained
• Salary/wage reductions per employee
• Eligible payroll
  • Be careful with owners’ compensation rules
  • $100K salary limit for all employees (prorated for Covered Period)
• 60 percent payroll expense threshold
• Eligible nonpayroll expenses
• EIDL Advance (this is done by SBA, but borrower/lender need to be aware of the amount)
• Eligible expenses easiest to document clearly meeting the current guidance and policy

Learn How Congressional Legislation Could Simplify Loan Forgiveness

Watch the replay to learn more about what new congressional legislation could mean for the loan forgiveness process as well as what borrowers should keep in mind about the loan review process.

Don’t miss upcoming Extra Credit Education Series and Financial Series webinars. Log in to the CFC Member Website to register or watch a replay.