Loan Forgiveness | Lead Bank

Loan Forgiveness

Please contact your Lead Bank loan officer for your online Loan Forgiveness Application.

  • What is included in the loan forgiveness?
      The Paycheck Protection Program Flexibility Act, which became a law on June 3, eases restrictions on small businesses as they seek loan forgiveness under the Paycheck Protection Program authorized by the CARES Act.    
    • Reduces the amount of the PPP loan to be spent on payroll from 75% to 60%, thus increasing the amount of funds available for other business costs to 40%.
    • Extends the window businesses have to use the funds from eight weeks to 24 weeks or until December 31, 2020.
    • Pushes back a June 30 deadline to rehire workers to December 31, 2020.
    • Provides more leeway on loan forgiveness for business owners who show they could not rehire workers or reopen due to safety standards.
    • Extends the period for when a business can apply for loan forgiveness, from within six months to within 10 months of the last day of the covered period, before it must start making interest and principal payments. Under the new bill, PPP loan interest and payment of principal and fees will be deferred until the loan is forgiven by the lender.
    • Increases the amount of time recipients have to repay the loan by extending the loan terms for any unforgiven portions that need to be repaid from two years to five years, at 1% interest.
    • Allows companies that get loan forgiveness to defer payroll taxes.
    • Allows small businesses to take a PPP loan and also qualify for a separate, recently enacted tax credit to defer payroll taxes, which is currently prohibited to prevent “double dipping.”
  • What are the measures of loan forgiveness?
    • Gives flexibility for businesses who received the loan in the middle of pay period since businesses are now able to use an "alternative payroll covered period" for those with a biweekly (or weekly) payroll schedule over the 24-week period, and can elect to calculate "eligible payroll costs" using the first pay period after they got the PPP funds, per the application.
    • Allows borrowers to include payroll and eligible non-payroll expenses that were incurred (not only paid) during the eight-week period after receiving the loan, so long as they're paid on or before the following regular payroll date.
    • Provides an exemption from the loan forgiveness reduction for borrowers if they have made "a good-faith, written offer to rehire workers that was declined"—calming some businesses’ fears about trying (and failing) to rehire employees in time to receive full forgiveness for the loan.
    • Includes clarity on how to calculate "full-time equivalents" for employees, which is key for the forgiveness side of the loans.
    • Read the full U.S. Department of the Treasury PPP loan forgiveness application news release including additional measures here.
  • How long will the process take? Once we receive the completed application and all pertinent supporting documents, the process can take up to 60 days to review and approve. The application will then be forwarded to the SBA. The SBA has 90 days to approve or deny the request. 
  • How do I apply for loan forgiveness? 
      *If you do not meet the above criteria, then please use the regular standard form.
      Note: Borrowers who received a SBA PPP loan through Lead Bank should complete the PPP loan forgiveness form online. This sample form is for illustrative purposes only.  
  • Click here for a list of supporting documentations.
  • Click here to find more information on the Loan Forgiveness Interim Rule.