SBA Paycheck Protection Program | Byline Bank

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The SBA has stopped accepting PPP applications as of August 8, 2020—Byline is no longer accepting new PPP loan applications. Please continue to check our website for updates.

Paycheck Protection Program (PPP) Loan Forgiveness

If you’ve received a loan through the Paycheck Protection Program (PPP), you may be eligible to request full or partial forgiveness of that loan from the SBA. We know this is a critical priority for many of you, and you may have questions regarding this forgiveness and how to apply for it.

We’re still awaiting updates from the SBA on the forgiveness process. Byline is not yet accepting forgiveness applications. We’ll provide additional information and instructions on how to apply through our automated process, to Byline PPP loan customers as the SBA finalizes guidance.

How you can prepare for loan forgiveness:

How Byline has helped small businesses:

PPP Infographic
*The above discussion and the following FAQs have been provided for informational purposes only, and are not intended to provide, and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors in addressing any of the matters discussed herein. Please note, the SBA and the Department of Treasury may be considering changes to the PPP affecting loan forgiveness, and have not yet issued a Final Rule for the program.

COVID-19 SBA Loan Programs Resources

We know there’s a lot to understand about the resources available to you. Here’s more information that can help.

PPP Forgiveness FAQs

Where do I request loan forgiveness for my PPP loan?

If you have received a PPP loan through Byline Bank you must submit an application for forgiveness through Byline. We have set up an online portal for forgiveness applications and will email you with login information when we are ready to begin accepting forgiveness applications following additional SBA guidance.

Should I begin to fill out the Forgiveness Application that’s available on the SBA website?

No. We will provide login information for our online portal when we are ready to begin accepting forgiveness applications, which will be automated and user friendly. Our goal is to simplify the questions and help to populate the forms.

When can I submit my application for forgiveness?

We will let you know once we begin to accept applications for forgiveness. At this time, we are awaiting further guidance from the SBA before we can accept forgiveness applications.

Is loan forgiveness automatic?

No. You must submit an application for forgiveness through Byline.  We will let you know when we begin accepting forgiveness applications.

What are eligible forgiveness expenses?

  • Payroll costs, as defined by the SBA (the PPP Flexibility Act revision states at least 60% of loan proceeds must be used for payroll costs for a loan to be fully forgiven)
  • Mortgage interest (for mortgages in existence on or before 2/15/20)
  • Rent (lease agreements in place on or before 2/15/20)
  • Utilities (servicing on or before 2/15/20)
  • Refinancing an SBA EIDL loan made between 1/31/20 – 4/3/20

What is the deferral period of the loan?

The PPP Flexibility Act extended the payment deferral period from 6 months after loan origination to the date the approved loan forgiveness amount is remitted to the lender. If a borrower does not submit its loan forgiveness request within 10 months after the end of the applicable loan forgiveness period, then the borrower will be required to begin making principal and interest payments after the 10-month period.

Do I have to repay the part of the loan that wasn’t forgiven?

Yes. The outstanding principal and interest on that portion of the loan which was not forgiven must be repaid based on SBA guidelines.

When do I need to use the loan proceeds to be eligible for loan forgiveness?

The PPP Flexibility Act extended the covered period a borrower may use funds to within 24 weeks of loan disbursement (i.e., when loan funds were deposited into your account), not to extend past December 31, 2020

When does the period begin for determining “payroll costs?”

The 24 week period for determining eligible payroll costs begins, at a qualifying borrower’s election, either on (i) the date the PPP loan is disbursed (“Covered Period”) or (ii) the first day of the borrower’s first payroll period following the day of the PPP loan disbursement (the “Alternative Period”). The SBA has provided certain borrowers with administrative flexibility to ensure covered payroll costs are eligible for loan forgiveness.  Please reference the SBA’s FAQs for Lenders and Borrowers for specific examples.

What is included in “cash compensation” for eligible payroll costs?

The Instructions to Schedule A to the Application define “cash compensation” to include “the sum of gross salary, gross wages, gross tips, gross commissions, paid leave (vacation, family, medical or sick leave, not including leave covered by the Families First Coronavirus Response Act), and allowances for dismissal or separation paid or incurred during the Covered Period or the [Alternative Period].”

What non-cash components are considered eligible payroll costs?

According to Schedule A of the Application, the following costs are considered eligible payroll costs:

  • Employer contributions for employee health insurance, including employer contributions to a self-insured, employer-sponsored group health plan, but excluding any pre-tax or after-tax contributions by employees.
  • Employer contributions to employee retirement plans on behalf of employees, but excluding any pre-tax or after-tax contributions by employees.
  • Employer state and local taxes assessed on employee compensation, but excluding any taxes withheld from employee earnings.

What if a borrower’s eligible non-payroll costs are incurred during the Covered Period, but are required to be paid after the Covered Period ends?

Eligible non-payroll costs that are either paid during the Covered Period or “incurred” during the Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period, are eligible for loan forgiveness.

How are FTEs calculated for purposes of the FTE headcount reduction calculation?

According to the application, an average full-time equivalent (“FTE”) employee headcount during the Covered Period or the Alternative Period is calculated as follows:

  • For each employee, the borrower is required to divide the average number of hours paid per week by 40, and round the total to the nearest tenth (the maximum for each employee is capped at 1.0); or
  • A simplified method that assigns a 1.0 for employees who work 40 hours or more per week and 0.5 for employees who work fewer hours may be used at the election of the borrower.

What if employees refuse to return to work, resign, or are terminated?

The PPP Flexibility Act expanded the safe harbor by extending the cutoff date for rehiring full-time equivalent employees and eliminating prior salary/wage reductions from June 30, 2020 to December 31,2020, providing PPP borrowers with more time to return to pre-COVID payroll levels to qualify for full forgiveness.

What documentation is needed for payroll, eligible non-payroll expenses, and FTEs?

Please reference our PPP Forgiveness Documentation guide, or the PPP Loan Forgiveness Application Form 3508EZ for a description of the documentation needed.

What documentation is needed for the SBA to audit borrower certifications with respect to PPP loans above $2million?

At this time, the SBA has issued no guidance that outlines how it will “audit” relevant borrower certifications for loans above $2million.

What certifications need to be made when submitting the forgiveness application?

The borrower is required to make a variety of certifications in submitting the Forgiveness Application, including but not limited to the following:

  • Certification that the dollar amount for which forgiveness is requested was used to pay costs that are eligible for forgiveness and that, if the funds were knowingly used for unauthorized purposes or the borrower knowingly makes a false statement to obtain forgiveness, the federal government may pursue recovery of loan amounts and/or civil or criminal fraud charges.
  • Certification of the borrower’s understanding and agreement that the SBA may request additional information for the purposes of evaluating the borrower’s eligibility for both (i) the PPP loan and (ii) loan forgiveness.

Also, the borrower must acknowledge that if it fails to provide information requested by the SBA, it may result in either a determination that the borrower was ineligible for the PPP loan or a denial of the borrower’s loan forgiveness application.

How long must I keep my PPP loan records?

Borrowers and lenders must retain PPP loan documentation for six (6) years after the date the loan is forgiven or paid in full.

Also, the borrower must acknowledge that if it fails to provide information requested by the SBA, it may result in either a determination that the borrower was ineligible for the PPP loan or a denial of the borrower’s loan forgiveness application.

These questions are meant to provide some helpful guidance as you navigate PPP Forgiveness issues, but they are not inclusive and are subject to change. Please remember to:

  • Maintain accurate recordsof all disbursements and payments made from PPP loan funds including dates of disbursements and payees
  • Keep records of any changes to full-time employee staffing, or reduction of employee compensation
  • Reviewthe SBA’s FAQs for PPP Lenders and Borrowers for additional information, as the SBA continues to update this

We will provide updates here, as they become available. Thank you in advance for your support and patience as we wait on the SBA’s guidance.