The Paycheck Protection Program for business recovery
The Federal Government's Coronavirus Aid, Relief, and Economic Security (CARES) Act is an emergency relief program created to help businesses recover.
The Small Business Administration’s (SBA) application deadline for the Paycheck Protection Program (PPP) Loans expired at 11:59pm, August 8, 2020. Webster is no longer accepting PPP applications. You may have heard that Congress is discussing new legislation. If legislation is passed and signed into law, we stand ready to resume accepting new PPP applications.
PPP loan forgiveness
Thank you for choosing Webster for your Small Business Administration (SBA) Paycheck Protection Program (PPP) Loan. You’re likely considering the next step of applying for loan forgiveness from the SBA.
There are certain requirements for loan forgiveness such as using the loan proceeds for eligible costs incurred or paid during the Covered Period. As a reminder, the Paycheck Protection Program Flexibility Act provides additional flexibility within the forgiveness component of the Act, including lengthening the covered period from 8 to 24 weeks.
- Download and complete the SBA Loan Forgiveness Application Form 3508, Form 3508EZ, or Form 3508S
- Gather all required supporting documentation
- Complete Webster’s digital application, upload your Form and supporting documentation
It is extremely important that the Forgiveness Application is complete, including all supporting documentation. We cannot accept an incomplete application to review for forgiveness. According to the law, Webster has sixty (60) days from receipt of a complete Forgiveness Application to render a forgiveness decision to the Borrower and the SBA. The SBA will have up to ninety (90) days to remit the appropriate forgiveness amount to Webster.*
We’ll send you a confirmation email and follow up if we have any further questions or need more information.
We encourage you to review the ‘Frequently Asked Questions’ below before applying.
* Webster will not be able to review your Forgiveness Application if the SBA is reviewing your Loan or Loan Application. Webster is required to notify you if the SBA is undertaking such a review.
Frequently Asked Questions
The Act provides additional flexibility within the forgiveness component of the Act, including:
- Lowering the required loan amount percentage that must be spent on payroll-related costs from 75% to 60%
- Lengthening the covered period businesses have to use the loan proceeds from 8 to 24 weeks
- Extending the June 30 deadline to rehire workers until December 31, 2020
In general, payroll costs paid or incurred during the covered period are eligible for forgiveness.
A borrower may submit a loan forgiveness application any time on or before the maturity date of the loan - including before the end of the covered period - if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness.
The 8-week or 24-week covered period starts on the date the lender makes the disbursement of the PPP loan to the borrower. The PPP Flexibility Act, which became law on June 5, 2020, extended the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement, providing substantially greater flexibility for borrowers to qualify for loan forgiveness. The 24-week period applies to all borrowers, but borrowers that received an SBA loan number before June 5, 2020, have the option to use an eight-week period.
To receive loan forgiveness, a borrower must complete and submit the Loan Forgiveness Application (SBA Form 3508, 3508EZ, 3508S) to the Lender. The Lender will review the application and make a decision regarding loan forgiveness. Per SBA guidance, the Lender has 60 days from receipt of a complete application to issue a decision to SBA. The SBA will, subject to any SBA review of the loan or loan application, remit the appropriate forgiveness amount to the Lender not later than 90 days after the Lender issues its decision to SBA.
To reflect changes made by the PPP Flexibility Act, the SBA revised the standard Loan Forgiveness Application Form 3058 and released a new three-page Form 3508EZ. Borrowers that do not qualify to use Form 3508EZ must use the standard Form 3508. Additionally, the SBA released a much-anticipated, streamlined loan forgiveness application for PPP loans totaling $50,000 or less. Links to these, including instructions and an eligibility Checklist for Using SBA Form 3508EZ are provided below:
Your SBA Loan Note (included in the Webster Bank closing documents sent via DocuSign) contains these and other important elements you’ll need to complete your Loan Forgiveness Application.
The SBA PPP Loan Number is located on Page 1, Section 1 of your SBA Loan Note
The Lender PPP Loan Number from Webster Bank (10-digits beginning with 4750) is located on Page 1 in the top right corner of your SBA Loan Note
No. The ‘PPP Loan Disbursement Date’ required on the Loan Forgiveness Application is the date you actually received the Loan Funds, a date later than what appears on your SBA Loan Note, Section 1. Refer to your bank account records or emails received from Webster Bank for the correct ‘PPP Loan Disbursement Date’.
If applicable, SBA will deduct EIDL Advance Amounts from the forgiveness amount remitted to the Lender as required by section 1110(e)(6) of the CARES Act.
If SBA determines in the course of its review that the borrower was ineligible for the PPP loan based on the provisions of the CARES Act, SBA rules or guidance available at the time of the borrower’s loan application, or the terms of the borrower’s PPP loan application (for example, because the borrower lacked an adequate basis for the certifications that it made in its PPP loan application), the loan will not be eligible for loan forgiveness. The Lender will notify you of the forgiveness amount. If only a portion of the loan is forgiven, or if the forgiveness request is denied, any remaining balance due on the loan must be repaid by the borrower on or before the maturity date of the loan. A borrower may notify the lender within 30 days of notice of the lender’s forgiveness decision that it is requesting that the SBA review the lender’s decision. The lender must notify the SBA of the borrower’s request for review within 5 days. The SBA will then either notify the lender it declines the request for review or, if it accepts a borrower’s request for review, notify the borrower and lender of the results.
If a PPP loan received an SBA loan number on or after June 5, 2020, the loan has a five-year maturity. If a PPP loan received an SBA loan number before June 5, 2020, the loan has a two-year maturity, unless the borrower and lender mutually agree to extend the term of the loan to five years. The promissory note for the PPP loan will state the term of the loan.