On behalf of everyone at Greater State Bank, I want to start off by saying “Thank you” for allowing us to be a part of your financial solution during this very trying time. I want to take a minute to notify and update you on your Paycheck Protection Program (PPP) loan and the process for applying for forgiveness of those loans which I know is of utmost importance for everyone.
MODIFICATION OF TERMS
As you may already be aware, recently the Small Business Administration (SBA) issued updated guidance pertaining to the Paycheck Protection Program Flexibility Act of 2020 (Flexibility Act) which specifically addressed the deferral period for payments of principal, interest, and fees on PPP loans.
As of October 7, 2020, clarification has been provided by the SBA which states that the Flexibility Act provides an extension of the deferral period from 6 months to 16 months on all active PPP loans. It further provides that when an application for forgiveness is submitted, it will be deferred until the SBA remits the borrower’s loan forgiveness amount to the Bank.
The Flexibility Act provides that lenders are required to give immediate effect to the statutory extension and should notify borrowers of the change to the deferral period. We will not require a formal modification to the Promissory Note you entered into, however, we will document that the Bank provided this notice to you.
Although at this point there is no clear and precise guidance for a simplified format for the application for forgiveness, the SBA has made attempts to simplify the process. At this point, the SBA has released 3 different application options and we are knowledgeable on all of them.
The Bank continues to monitor and encourage the SBA to issue an even more simplified, single page, forgiveness application for all loans under $150,000. Since there has yet to be a simplified application released, we are hesitant to push our borrowers with loans under $150,000 to submit forgiveness applications at this time. First and foremost, this hesitancy is out of concern for our borrowers as a result of a lack of information from the SBA on denied forgiveness applications and any other issues that may arise at this early stage of the process. We are working hard to provide you the information you need to ensure that you have all of the information needed to meet the criteria for PPP loan forgiveness.
Greater State Bank is accepting forgiveness applications and will not prevent anyone from submitting an application for forgiveness once it has met all of the necessary qualifications. Our lenders are well versed in the current applications and requirements to submit an application for forgiveness. I know this is a lot of information combined with a somewhat evolving process, so please do not hesitate to contact your lender if you have any questions at all about this process and your PPP loan.
Again, on behalf of all of us at Greater State Bank, I thank you for trusting us with your banking business and for allowing us the privilege of providing financial solutions to you and your business during this most unique time. We will continue to track the changes to this ever-changing program with the goal of providing you the information that is most advantageous to you and your business and remain available to answer any questions you may have moving forward.
Robert A. McGurk
President & CEO