First Utah Bank’s goal through the PPP lending process has been to provide a customized, high-touch solution to help our customers navigate the CARES Act. Therefore, our preference has been to reach out to each of our applicants, either by phone or email, and provide the best information we have in a timely manner. This has been difficult as the rules and definitions have not been consistent throughout the process. A case in point, is that late in the evening of June 10th, the Small Business Administration issued new Paycheck Protection Program application forms and an interim final rule.
The most impactful changes include extending the amount of time borrowers have to spend PPP funds from eight to 24 weeks while remaining eligible for forgiveness and the reduction of the amount that must be spent on payroll costs from 75 percent to 60 percent.
The new rule clarifies that 60 percent of the loan forgiveness amount must be payroll, but borrowers will receive partial forgiveness to the extent they fall short of 60 percent. In addition, the new five-year maturity term applies to loans that receive an SBA approval on June 5, 2020 or after (this applies to very few First Utah Bank PPP loan borrowers). The rule notes that SBA and Treasury will provide further guidance to update the forgiveness and loan review interim final rules as well as guidance on advance purchases of PPP loans by SBA.
First Utah Bank will be launching a web-accessible program that will streamline your request for forgiveness. We are urging our customers NOT to fill out the forms provided by the SBA and Treasury. The most up to date guidance will be provided in our online system, and the highlighted language indicates to us that the final version of the Rule has not been set.
We will reach out to you via email as soon as we can with instructions for you to get started.
Here are links to the new resources should you wish to review additional information.