IBAT members have stepped up to provide PPP loans to the small businesses in their communities. IBAT has stepped in to provide the following new PPP resources to its members.

We understand the challenge that this complex law has presented to community banks.  With that in mind, our PPP Team has identified key, new resources for the next phase of this program. In addition, it has prepared sample documents to assist community banks with communications with their customers. Please remember that these are samples only and should be reviewed with your own bank counsel before using.

Amortization Calculator 

IBAT has received questions from multiple members and heard about the challenges of using the bank’s current loan platform to determine the amortization schedule of a PPP loan with an unforgiven amount (such as an EIDL advance). To assist, IBAT has prepared a free amortization calculator tool to assist you with this. Click here to download the tool.

SBA and Treasury Announce Simpler PPP Forgiveness for Loans of $50,000 or Less (10.08.2020)

  • Click here to view the simpler loan forgiveness application.
  • Click here to view the instructions for completing the simpler loan forgiveness application.
  • Click here to view the Interim Final Rule on the simpler forgiveness process for loans of $50,000 or less.

IBAT Resource. Sample letters to inform customers of their debt forgiveness status have been drafted:

  1. Letter explaining forgiveness process
  2. Letter following SBA complete forgiveness
  3. Letter when forgiveness application was denied explaining appeal
  4. Letter when forgiveness is partial

Paycheck Protection Program (PPP) Policy Update (10.07.2020)

Frequently Asked Questions – FAQ # 52 has been added October 7

Question: The Paycheck Protection Program Flexibility Act of 2020 (Flexibility Act) extended the deferral period for borrower payments of principal, interest, and fees on all PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period). Previously, the deferral period could end after 6 months. Are lenders and borrowers required to modify promissory notes used for PPP loans to reflect the extended deferral period?

Answer: The extension of the deferral period under the Flexibility Act automatically applies to all PPP loans. Lenders are required to give immediate effect to the statutory extension and should notify borrowers of the change to the deferral period. SBA does not require a formal modification to the promissory note. A modification of a promissory note to reflect the required statutory deferral period under the Flexibility Act will have no effect on the SBA’s guarantee of a PPP loan.

IBAT Resource:  Sample language notifying customer of revised deferral period.

Paycheck Protection Program (PPP) Policy Update (10.02.2020)

  • IRS Announcement: Information Reporting Requirements for Paycheck Protection Program Loans Forgiven under the CARES Act Announcement 2020-12: Lenders are not required to file Form 1099-C (debt forgiveness).

Legislative Update
While things in DC can change in a heartbeat, the chances of getting a timely legislative fix for blanket forgiveness are simply not good. Politics is clearly driving the day, and has eclipsed good public policy as is so often the case in the days leading up to an election.  Pity.  

We are pleased that a scaled back (for PPP loans of $50,000 and under) administrative fix from Treasury and SBA was announced. Barring a surprise consensus bill, a more robust legislative fix will hopefully be in a “lame duck” COVID bill that is expected to be passed shortly after the elections.   IBAT continues to press, along with a number of others, for common sense action on this seemingly simple and broadly supported measure.