SBA Paycheck Protection Program
Round One Loan Forgiveness
The Economic Aid Act was signed into law on December 27 and includes certain changes to the forgiveness process.
- For loans of $150,000 and under, the Act provides for a simplified forgiveness application, requiring no supporting documentation to be submitted (unless otherwise requested by the SBA). The new streamlined application is expected to be made available in January 2021.
- Additionally, according to current SBA guidance, if a client’s forgiveness application under their Round One First Draw loan is under SBA review for forgiveness, or the SBA has information indicating that a borrower may have been ineligible for a loan, the borrower will be unable to receive a SBA loan number for a Second Draw loan until the forgiveness review is complete and resolved.
- We strongly encourage you to work closely with your tax, legal and accounting advisors to weigh the benefits of waiting to complete your loan forgiveness application until the SBA issues its new guidelines and application, and lenders can implement them.
Forgiveness Application Resources
If you choose to move forward with your forgiveness application at this time, the following resources and information have been designed to help you prepare for submitting your forgiveness application and supporting documentation.
- Knowledge Center: Detailed overview of the Paycheck Protection Program and loan forgiveness process, answers to frequently asked questions, and more.
- Borrower Reference Guide: Step-by-step instructions and best practices for completing your online application in the Loan Forgiveness Portal.
- Documentation Considerations: For C-Corporations, S-Corporations, LLCs taxed as Corporations and Nonprofit Organizations
- Documentation Considerations: For Sole Proprietors, Self-Employed Individuals, Independent Contractors, Partnerships and LLCs taxed as Sole Proprietors or Partnership
These resources are designed to offer considerations based on the SBA’s loan forgiveness applications and the forgiveness guidelines for the Paycheck Protection Program as currently understood. It is very important to take note that the SBA may issue further guidance with respect to loan forgiveness.
Borrowers must continue to consult with their tax, accounting and legal advisors while completing the Loan Forgiveness Application and all related schedules and worksheets. First Republic is providing informational resources to help support clients through the process, but cannot provide tax, accounting or legal advice. Please see below for other important information regarding your PPP loan and loan forgiveness.
For information on the PPP Second Round, please visit our resources page.
Important Information on the Small Business Administration (“SBA”) Paycheck Protection Program
This information reflects First Republic’s understanding of the PPP regulations and the Loan Forgiveness Application as of the date hereof. The PPP regulations and the Loan Forgiveness Application are subject to change and uncertainty as to application. First Republic has no obligation to update this information or to provide you any supplemental information for any changes made to or further guidance provided with respect to the PPP regulations or the Loan Forgiveness Application after the date hereof or otherwise.
First Republic is providing any information for convenience purposes only. You are responsible for determining eligibility for the PPP loan and forgiveness, filling out the Loan Forgiveness Application and providing true and correct information to First Republic. You are solely responsible for your use of any information and ensuring that you comply with the Loan Forgiveness Application and PPP regulations.
First Republic is not acting as your advisor in determining whether you qualify for a PPP loan or loan forgiveness, whether the information you have previously provided to First Republic or provide with your Loan Forgiveness Application is correct, or otherwise. That is your responsibility. First Republic and the SBA are relying on you, as the borrower, to determine whether you qualify for the loan or forgiveness and whether the calculations and information provided are accurate and complete. While the headings and information included here are based on the applicable PPP regulations, such headings and information are provided for convenience purposes only. You are solely responsible for its use of this information and ensuring that it complies with the PPP regulations.
First Republic cannot guarantee forgiveness of your PPP loan, and loan forgiveness is subject in all respects to the Loan Forgiveness Application and PPP regulations. Forgiveness of your PPP loan is only available for eligible payroll costs and other uses of proceeds during the applicable covered period under the PPP regulations. Forgiveness of your PPP loan is not automatic, and you must request it. You are required to provide the completed Loan Forgiveness Application and documentation in accordance with the Loan Forgiveness Application and PPP regulations and certify that the forgiveness amount qualifies under the PPP regulations, in addition to complying with such further processes, procedures and requirements that First Republic may require in connection with the PPP loan, permitted uses of proceeds and forgiveness of such loan.
First Republic will not apply for loan forgiveness for you, and you are responsible for understanding the PPP regulations applicable to loan forgiveness. First Republic will, through an online portal, intake your Loan Forgiveness Application and supporting documentation and confirm your application is complete before requesting approval from the SBA on your behalf. The actual processes for loan forgiveness applications have not been finalized and are subject to change; and you may be required to resubmit your Loan Forgiveness Application and supporting documentation in the future in order to comply with any changes to the application process and procedures. You are required to submit any and all information, consents, forms and documentation that First Republic requests as a condition to First Republic submitting an application for forgiveness. First Republic is not advising you on your eligibility for your PPP loan, the Loan Forgiveness Application, the PPP regulations, loan forgiveness or any other aspect of the PPP. It is your sole responsibility to determine and certify as to your eligibility for loans and loan forgiveness and compliance with the Loan Forgiveness Application and PPP regulations.
You will remain responsible under the PPP loan for any amounts not forgiven, for whatever reason. The SBA and First Republic will rely upon your information and certifications in all respects. If any such information or certification is not correct, or you do not qualify for the loan or loan forgiveness, you remain liable to First Republic (or any subsequent holder of your note) and the SBA for repayment of the loan.
You further acknowledge and agree that you have not relied on First Republic in connection with your review, analysis or implementation of the PPP regulations or Loan Forgiveness Application, including with respect to permitted uses of PPP loan proceeds or any determination or decision in connection with the forgiveness of a PPP loan; you have reviewed the PPP regulations and Loan Forgiveness Application and consulted with your own legal, tax, financial and other advisors regarding the PPP regulations, the PPP loan and forgiveness of the PPP loan; you and your affiliates will comply with all PPP regulations applicable to the PPP loan, including with respect to permitted uses of loan proceeds and forgiveness of such loan.
You agree to release, indemnify and hold harmless First Republic from and against all claims, costs, expenses, damages and liabilities (including reasonable attorney’s fees) that may be instituted or asserted against or incurred by First Republic in connection with or arising out your PPP loan, including, without limitation, with respect to any determinations, denials or actions taken or not taken in respect of forgiveness of your PPP loan.