Paycheck Protection Program Loan Forgiveness

26 Jun 2020

What's new?

Effective June 5, 2020, the Paycheck Protection Program Flexibility Act of 2020 (the “Act”) was signed. Here are a few of the important updates and changes about your PPP Loan that you should know:

  • All loans approved on or after June 5, 2020, will have a maturity date of five (5) years from the date of the note.
  • The covered period for the loan forgiveness was extended from eight to 24 weeks. However, borrowers with loans taken before June 5th can still choose the eight-week period. 
  • The Act reduced the amount that you needed to spend on payroll in order to obtain forgiveness from 75% to 60%.  The remaining 40% may be spent on allowed non-payroll expenses.
  • Any payments of principal and interest will be deferred until the date on which the amount of forgiveness is remitted by the Small Business Administration to the lender. If you fail to apply for forgiveness of the loan within 10 months after the last day of the loan forgiveness covered period, you must start making payments of principal, interest and fees on the Loan.
  • The Act also provides additional flexibility for loan forgiveness and actions that may cause a reduction of loan forgiveness, relating to rehiring, employee availability and restoration of number of employees. 

Loan Forgiveness

If your PPP loan was funded through AgCountry, AgCountry will reach out to you with details on how to submit your Loan Forgiveness Application once we finalize our loan forgiveness process. 

On May 18, SBA released the official Paycheck Protection Program Loan Forgiveness Application (SBA Form 3508) for PPP loans.  This form was revised on June 16, 2020, to implement the PPP Flexibility Act of 2020.

In addition to revising the full forgiveness application, on June 16, 2020, SBA also released the PPP Loan Forgiveness Application Form 3508 EZ. This new EZ form applies to borrowers that:

  • Are self-employed and have no employees; OR
  • Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; OR
  • Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.

The EZ application requires fewer calculations and less documentation for eligible borrowers. 

Important Information About the Forgiveness Process

  • Loan forgiveness is not automatic, you must request it through AgCountry.
  • AgCountry will contact you regarding when and how you can request loan forgiveness.   We expect to be ready to begin accepting applications in early July. However, AgCountry cannot process any applications until SBA can begin accepting applications.
  • You will need to complete the Paycheck Protection Program Loan Forgiveness Application (SBA Form 3508 or SBA Form 3508EZ) and provide all of the required documentation to AgCountry.

Do not submit this form at this time - AgCountry is developing a process to allow this form to be completed online. 

  • Once you apply, AgCountry will review the application received from the borrower, confirm all required supporting documentation has been provided, and confirm necessary calculations appear correct.  
  • Once we have received a completed application, AgCountry has 60 days to review and approve or deny the completed application. 
  • If the application is approved by AgCountry, AgCountry will submit the application to the SBA for a decision. SBA will have 90 days to act on the submitted forgiveness application.
  • Once the SBA makes a decision on a submitted application, AgCountry will inform you of the decision.
  • If your application is denied, AgCountry will notify you in writing and you will have 30 days to request an SBA review of the denial.
  • You will be responsible for all amounts not forgiven. 
  • For any amount not forgiven, PPP loan payments start no later than seven months after the loan funds were disbursed. 
  • SBA reserves the right to conduct further review on any PPP Loan Forgiveness Application. While you wait to hear from us, please review the PPP Loan Forgiveness Document Checklist to assist you with gathering everything you will need for the application.
  • Requirements as laid out here are subject to change. 
Informational Purposes Only: This document is being provided for informational purposes only. It should not be construed as business, legal, accounting, tax, financial, investment or other advice on any matter and should not be relied upon for such. The PPP is a complex program that is being implemented at high speed. Program terms are set by the Small Business Administration (SBA) and Treasury and are subject to change at any time without notice. AgCountry is not the primary source of the program information provided and does not guarantee its accuracy.  

Requests for loan forgiveness are subject to SBA requirements in effect at the time of the request. This information represents our best understanding and interpretation based on where things currently stand.  We will continue to track the SBA and Department of Treasury guidance issued for implementing the program and be making necessary changes as required.We encourage you to monitor the resources below for up to date information and, if necessary, to consult your independent legal, tax and financial advisors for further guidance.


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