This is the latest response from Union Bank to us.
Dear Valued Business Client, Congratulations on receiving a Paycheck Protection Program (PPP) loan from the Small Business Administration (SBA). As your trusted financial partner, we want to help you prepare to apply for PPP loan forgiveness1. We encourage you to begin preparing now based on Frequently Asked Questions (FAQs) issued by the Treasury Department2 and Interim rules from the SBA3:
PPP loan forgiveness is not automatic; you are required to apply and provide documentation of forgivable expenses to support your application2. We will provide application instructions to you via email when it is time to submit your request.
The PPP program is designed to provide a direct incentive for you to keep your employees on payroll3.
Eligibility to receive loan forgiveness is based on your specific use of the funds during the 8-week period after loan disbursement. As provided in the regulations and guidance from the SBA and the Treasury Department, at least 75% of PPP loan proceeds must be used for payroll expenses and not more than 25% may be used for certain specified non-payroll costs2, including but not limited to the following:
Interest payments on mortgage obligations (in effect before February 15, 2020);
Rent payments under lease agreements (in effect before February 15, 2020); and
Utility payments under service agreements (in effect before February 15, 2020).
The amount of PPP loan forgiveness depends on your total documented expenses over the 8-week period after loan disbursement3.
PPP loan payments are deferred for six months from disbursement date. However, interest will accrue throughout the term of your loan. If your loan is not fully forgiven, you are responsible for any unpaid amounts3.
Businesses are the backbone of our economy and we remain deeply committed to supporting our business clients during these uncertain times. As additional information becomes available, we will update our COVID-19 Resource Center at Unionbank.com. Sincerely, Todd Hollander
Head of Business Banking
1 Paycheck Protection Program loan forgiveness is not guaranteed and is subject to approval by the Small Business Administration.
2 Paycheck Protection Program Loans Frequently Asked Questions (FAQs) sourced from www.treasury.gov on May 3, 2020 and is subject to change based upon the issuance of new guidance and/or changes in laws.
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