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Paycheck Protection Program (PPP) Loan Forgiveness

Paycheck Protection Program (PPP) Loan Forgiveness


If your PPP loan is up to $150,000, apply for forgiveness using the SBA Direct Forgiveness Portal.   
If your PPP loan is more than $150,000, apply for forgiveness using the CPB portal.


Borrowers with loans up to $150,000 will now apply for forgiveness directly to the SBA

To help small businesses focus on successfully reopening, Central Pacific Bank has “opted in” to the SBA Direct Forgiveness Portal. This new streamlined application portal allows borrowers with PPP loans of $150,000 or less to apply for forgiveness directly through the SBA.  

The SBA initiated this program to allow PPP borrowers to put their concerns of achieving full forgiveness behind them and focus on operating and growing their businesses again.

Before applying, review the SBA’s Direct Forgiveness User Portal Guide here.

GET LOAN FORGIVENESS NOW

Advantages of the SBA Direct Portal

The direct forgiveness portal has several advantages for borrowers with loans of $150,000 and under, including:

  • Easy online application form that can be completed within 5 minutes
  • Immediate feedback of issues
  • Ability to check on forgiveness application status
  • Ability to download Certificate that forgiveness has been granted once approved
  • For Second Draw loan customers, the ability to use the same registration to create and submit forgiveness application
  • Second Draw loan customers may not have to upload documentation on 25% revenue reduction if your business has been scored by SBA as no documents required
  • Borrower telephone support directly by the SBA from 8 am to 8 pm ET, Monday through Friday, at 877-552-2692

As a result of these advantages, CPB will conclude accepting forgiveness applications, except in the following conditions:

  • Your PPP loan is more than $150,000. Borrowers with loans more than $150,000 may access the CPB Forgiveness portal here.
  • Or, if you experience an issue in submitting your application through the SBA direct portal and the SBA directs you to apply through us.
GET LOAN FORGIVENESS NOW

PPP Forgiveness helps move your business forward

The Paycheck Protection Program (PPP) is essentially a tax-free grant from the SBA and one of the most beneficial aspects of the program is the opportunity to have full cancellation of the loan and any accrued interest forgiven.

You’re encouraged to apply for loan forgiveness before your 10 month deferral period ends. Once your deferral period ends, you have to start making monthly payments with loan terms of 1% interest.

Any amount of the loan that is not forgiven must be repaid by the borrower plus interest over an approximately 8-month period, if the loan was made before June 5, 2020, or approximately a 3.5-year period if the loan was made after June 5, 2020.

Eligible expenses for PPP forgiveness

Forgiveness was previously predicated on expenses incurred or paid for payroll costs, mortgage interest, rent or lease costs and utilities. For any borrower who has not yet filed a forgiveness application, they may now include:

  • Covered operations expenditures– which include business software or cloud computing services, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses.
  • Covered supplier costs– payments made to a supplier under a contract or purchase order for goods that are “essential to the operations of the entity” (leaving the definition of “essential” to the borrower). Note that the contract or purchase order must have been in place prior to the covered period of the existing PPP loan unless it was for perishable goods, which could be in place at any time.
  • Covered worker protection expenditures– any operating or capital cost incurred to comply with safety or sanitation requirements put in place between March 1, 2020, and the end of the national emergency (once declared). Such costs can include establishment of a drive-through window facility, new ventilation or filtration systems, physical barriers, expanded space or other assets relating to compliance with government requirements.
  • Covered property damage costs– for costs related to civil disturbances during 2020 that were not covered by insurance.
  • Payroll expenses– now expanded to include employer payments for group life, disability, vision or dental insurance, which were previously excluded.

In short, there are many more business expenses that may be used for forgiveness support with these expanded eligible expenses.

PPP forgiveness is available to all borrowers

Forgiveness is not automatic. You must request it by submitting your application.

For loans up to $150,000 use the SBA direct portal here.

For loans more than $150,000 use the CPB online portal here.

  • CPB will pre-fill the following information on your forgiveness request:
    • Standard business information, such as business name, address, email, Business TIN (EIN or SSN)
    • SBA PPP Loan Number
    • Lender PPP Loan Number
    • Funded PPP Loan Amount
    • PPP Loan Disbursement Date
  • You’ll need to certify and document that you used the loan funds for SBA-eligible purposes.
  • You’ll be able to check your forgiveness status online after you submit your request.
  • Once the SBA makes a decision, we’ll email you. Average response from the SBA is within 12 business days. Best of all, nearly 96%of our customers who have applied for forgiveness received approval that their loan is fully forgiven.   

A few things to prepare for PPP forgiveness:

If your PPP loan is up to $150,000, review the SBA’s Direct Forgiveness User Portal Guide here.

If your PPP loan is more than $150,000, familiarize yourself with SBA Form 3508 or 3508EZ to see which applies to your forgiveness request. This ensures a smooth application process and improves your chances of having your loan 100% forgiven.

  • Form 3508EZ or 3508 – you are not required to fill out either form before starting your online forgiveness request because you will input it into the CPB loan forgiveness portal.
  • PPP Schedule A Worksheet – if Form 3508 applies to you, you are required to complete the PPP Schedule A Worksheet before requesting forgiveness.
  • Gather documents to support your eligible payroll and non-payroll costs.
  • To make it easier to apply, we recommend preparing all the information required in the Forgiveness Application in a worksheet. Some organizations such as the AICPA are providing loan forgiveness calculators/worksheets which are publicly available and free of charge. Click HERE to view the AICPA’s dynamic tool. 

Note: If you use such a calculator/worksheet you should confirm it is current with the latest PPP forgiveness rules, and be advised that you remain fully responsible for the accuracy, correctness and completeness of your forgiveness information, calculations and submission to your lender and SBA. 

Reminder: You have 10 months after the end of the Covered Period to submit your loan forgiveness application.

As long as you submit your application before the deadline, you do not need to make any payments on your loan while awaiting a status update from the Small Business Administration. 

CPB will notify borrowers with loans more than $150,000 when we receive from SBA either (a) payment for the portion of your loan that has been forgiven or (b) notice that your loan is not eligible for forgiveness.

  • You will not owe anything on the loan if your loan is fully forgiven.
  • If only part of your loan is forgiven or if your forgiveness application is denied, you must repay the balance of your loan that is not forgiven by your loan’s maturity date. CPB will notify you of the date on which your first loan payment is due.

Responses to Frequently Asked Questions about PPP loan forgiveness.

For information or questions regarding loan forgiveness

Other Reminders

  • Stay safe from scammers: Prevent fraud due to release of PPP program loan data - In an effort of transparency, the SBA, in consultation with the Treasury Department, released a spreadsheet of data that included information about PPP loans at the loan level. This spreadsheet includes the names of business recipients, their associated addresses, and lending partner.

    This may result in the “bad guys” being able to easily target PPP loan recipients by phone or online, posing as someone from the bank. If you receive suspicious communication regarding your PPP loan and are unsure of how to proceed, contact us immediately at [email protected] or 808-544-6865.
  • SBA Alert: The Office of Inspector General recognizes that we are facing unprecedented times and is alerting the public about potential fraud schemes related to economic stimulus programs offered by the U.S. Small Business Administration in response to the Novel Coronavirus Pandemic (COVID-19). The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the largest financial assistance bill to date, includes provisions to help small businesses. Fraudsters have already begun targeting small business owners during these economically difficult times. Be on the lookout for grant fraud, loan fraud, and phishing.  Please see the SBA Fraud Alert for more information. 

Disclosures
This communication is as of September 7, 2021 and is intended to assist PPP applicants/borrowers in understanding and complying with the Paycheck Protection Program (“PPP”) laws, regulations, requirements and rules (collectively “PPP Rules”). This is only a general description/summary of the matters covered herein. PPP applicants/borrower should consult the PPP Rules for the complete coverage. Central Pacific Bank (“CPB”) is not rendering any legal, tax, accounting, business or other advice to PPP applicants/borrowers in connection with the PPP which is a federal government program and subject at all times to the PPP Rules as they may be changed, amended or supplemented at any time by the federal government. PPP applicants/borrowers are strongly encouraged to seek the advice of legal, tax, accounting, and other professional advisors respecting the PPP. PPP applicants/borrowers are solely responsible for determining their eligibility for the PPP and compliance with all PPP Rules, and shall not rely on CPB or any employee or representative of CPB respecting the PPP Rules or any interpretation or application thereof. CPB has no obligation or responsibility to update this communication as additional PPP Rules are issued or if any PPP Rules are changed, amended or clarified. PPP applicants/borrowers must monitor the government’s PPP websites at https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses and https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program for any updates to the PPP Rules.

 

CPB