New applications for the SBA’s Paycheck Protection Program concluded June 30, 2020, but is in the process of being extended.  Please contact your credit union to see if they are taking new applications. 

Loan Details and Forgiveness

The loan may be fully forgiven if the funds are used primarily for payroll costs, but proceeds may also be used for interest on mortgages, rent, and utilities.   At least 60% of the loan must be for payroll purposes,  Keeping detailed records is very important.  

Forgiveness is based on the employer maintaining or rehiring employees and maintaining salary levels compared to previous year averages.  Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. Businesses have as many as 24 weeks from the date of the loan to achieve the payroll and FTE levels needed for forgiveness.  

The forgiveness rules continue to evolve, and as of yet we have no instruction on how exactly lenders submit forgiveness requests to the SBA.  

MBC’s Role with Forgiveness Applications

MBC will be helping our credit unions process forgiveness requests, using a paperless technology solution that will allow businesses to complete the forgiveness application and submit the necessary payroll and expense documentation conveniently and securely directly to MBC via the internet.  We will then review the information and provide it to the credit union for the forgiveness decision.  If approved, the application will then be sent to the SBA for their approval.  

When the final rules of forgiveness are known, we will be sending via email an invitation to begin the forgiveness application process to each business that received a PPP loan from one of our credit unions.  We expect that process to begin in mid July, or possibly later if the rules continue to change.  

Businesses must apply for loan forgiveness within ten months of the receipt of their loan.    Lenders have 60 days to review forgiveness applications and render their decision.  The SBA has 90 days to review the lender’s forgiveness decision and approve or deny the forgiveness action.  Borrowers will not need to pay any payments during this time, and all interest that accrues will be paid by the US Treasury on the portion actually forgiven.  

This may continue to evolve, so check back here for updates.  If you have questions about your loan, contact your credit union lender at this time.  For general information, the best place to go is here.