Last Updated: 1/15/2021
The information provided is intended for informational use only and is subject to change.
An update for our customers: new Congress stimulus bill
As you may have heard, on December 27, new federal stimulus legislation was approved, and it includes continuing the Paycheck Protection Program (PPP) and providing additional assistance to small businesses affected by the Covid-19 pandemic.
To help with your planning, below is a preliminary summary of highlights in the new legislation, keeping in mind this is a fluid situation and we’ll keep you informed if information changes.
#1: Paycheck Protection Program Simplified Loan Forgiveness
Simplifies the forgiveness application process for smaller loans up to $150,000 and expanded expenses that are eligible for forgiveness for new PPP loans taken out in 2021.
If you received a PPP loan from Eastern during the first round of PPP funding, there is no action to take until the SBA issues further guidance and we contact you. Since changes are expected, if you have not yet applied for loan forgiveness, you may want to wait. We’ll send you an e-mail with an invitation to apply once the necessary updates have been made to accommodate these changes.
If your loan forgiveness application of any amount is currently in process, we’ll contact you with next steps.
#2: Other Highlights
Paycheck Protection Program Loans for First-Time and Second-Time Borrowers
Establishes a new round of PPP loans for eligible businesses. Click here to learn more and apply.
Tax and Small Business Lending Highlights in the New Legislation Include:
- Business expenses paid with PPP loans are tax deductible, consistent with the CARES Act.
- Section 1112 of the CARES Act has been extended, which provides payment of principal, interest, and associated fees on qualifying SBA 7(a), 504 and microloans.
- If you are an EIDL borrower, the Advance Deduction in Section 1110(e)(6) of the CARES Act has been repealed.
Loan Forgiveness Next Steps
We’re working to update our automated platform so that your application with us – for loan forgiveness – is convenient. We’ll send you another message soon with information on how we’ll be administering this newest PPP loan forgiveness legislation.
In the meantime, for the latest information on PPP forgiveness, visit SBA.gov and Treasury.gov. For EIDL loans, visit the SBA here.
Please also be alert – scammers attempt to take advantage of PPP programs to perpetuate fraudulent activity. If you are contacted by the SBA directly, notify your Eastern banker immediately for assistance and before providing any information. Learn more about COVID-19 scams here.
The information provided is intended for informational use only and is subject to change.
If you have secured Federal Paycheck Protection Program (PPP) loan funding with the Small Business Administration (SBA) through Eastern Bank, you may be wondering what's next and what to know about loan forgiveness.
Remember, based on the latest updates from the SBA, you now have more time to apply for loan forgiveness and can wait before submitting your application. This may be beneficial should new Federal guidelines be announced that may impact your application. There are also safe harbor provisions that you may want to familiarize yourself with that could impact forgiveness that run through the end of the year.
When you are ready to apply, keep in mind the following:
- As of November 5, Eastern Bank is accepting applications for PPP loan forgiveness. Approximately at the end of the borrower’s 24-week Covered Period, customers will receive an invitation to apply by email. The email will contain a link with information on the process and access to the loan forgiveness application portal. All Eastern PPP loan customers will need to apply for loan forgiveness through our digital platform. We are not accepting paper applications.
- The platform will follow the content of the forgiveness applications issued by the Small Business Administration (SBA). It will guide you to the right application to complete and prompt you step-by-step to add your information, but the application forms will not be uploaded into the platform. Please familiarize yourself with the information requested in the applications, and if you qualify to use the “S”, “EZ” or “Standard” applications.
- Please allow up to 60 days for Eastern to validate your forgiveness application. Any approved forgiveness amount must also be approved by the SBA, which may take up to 90 days following the bank’s determination.
- Based on its latest updates, the Small Business Administration (SBA) has stated you can apply for forgiveness any time during the term of your loan, and the payment is deferred up to 16 months. You can apply any time after your chosen covered period (either 8 weeks or 24 weeks) but ultimately, you should do what is most beneficial to you and your business and it may be beneficial to wait a few months to apply.
For your convenience, you may also e-mail Eastern at PPPinquiry@easternbank.com.
This dedicated e-mail address is staffed by bankers who can assist with questions during regular business hours.
Documentation and Getting Prepared
The information provided is intended for informational use only and is subject to change.
Documents you will need for forgiveness
If you have received an SBA Paycheck Protection Program loan, the next step is to prepare for forgiveness of your loan. SBA forgiveness is not automatic. You’ll need to apply, and there are a number of requirements.
- Approximately at the end of the borrower’s 24-week Covered Period, customers will receive an invitation to apply by email. The email will contain a link with information on the process and access to the loan forgiveness application portal. All Eastern PPP loan customers will need to apply for loan forgiveness through our digital platform. It is an entirely online process. No paper applications are being accepted.
- Our automated platform will prompt you to answer questions about your loan and then will guide you to the SBA forgiveness application to complete. The SBA has created the simpler Form 3508S for smaller loans of $50,000 or less, or otherwise use Form 3508EZ or 3508Standard.
BEFORE YOU APPLY FOR FORGIVENESS:
- Familiarize yourself with the SBA Form to use
- Form 3508S (for smaller loans of $50,000 or less)
- Form 3508EZ
- Form 3508Standard
- Review the instructions for your SBA Form, then organize your required documentation and be prepared to upload it in our automated platform when you apply
- Form 3508S Instructions (for smaller loans of $50,000 or less)
- Form 3508EZ Instructions
- Form 3508Standard Instructions
- Read about your most frequently asked documentation questions below
Keep in mind, these are a few preparations your small business may want to consider, but they are by no means all the factors you may need to take into account to qualify for PPP loan forgiveness. Finally, as a PPP lender, Eastern Bank can’t offer an opinion on whether the loan of any particular borrower qualifies for forgiveness.
When To Apply
Based on its latest updates, the Small Business Administration (SBA) has stated you can apply for forgiveness any time during the term of your loan, and the payment is deferred up to 16 months. Remember, based on these latest updates, you now have more time to apply and can wait before submitting your application. This may be beneficial should new Federal guidelines be announced that may impact your application. There are also safe harbor provisions that you may want to familiarize yourself with that could impact forgiveness that run through the end of the year.
You can apply any time after your chosen covered period (either 8 weeks or 24 weeks) but ultimately, you should do what is most beneficial to you and your business and it may be beneficial to wait a few months to apply.
5 Points To Remember About When To Apply
- SBA guideline - Based on its latest updates, the Small Business Administration (SBA) has stated you can apply for forgiveness any time during the term of your loan, and the payment is deferred up to 16 months.
- Payment deferral - We are automatically deferring the payments on all PPP loans with Eastern Bank for 16 months, or up to 10 months from the end of your24 week forgiveness period.
- Pending Congressional legislation - The possibility remains of new Congressional legislation that may change loan forgiveness requirements. Please visit SBA.gov or Treasury.gov for any updates.
- Tax and other implications - You may want to consider working with a tax, legal or other trusted professional before you apply for loan forgiveness. Please be aware that there are safe harbor provisions that you may want to familiarize yourself with that could impact forgiveness that run through the end of the year.
- Processing time - Please allow up to 60 days for Eastern to validate your forgiveness application. Any approved forgiveness amount must also be approved by the SBA, which may take up to 90 days following the bank’s determination.
The information provided is intended for informational use only and is subject to change.
6 Points To Remember About The SBA's PPP Loan Forgiveness Application
Here are 6 points to know now about PPP loan forgiveness, as per the SBA’s application and related worksheets:
Keep in mind, these are just a few points to consider, but are by no means all the steps you may need to take to qualify for PPP loan forgiveness. Finally, as a PPP lender, Eastern Bank can’t offer an opinion on whether the loan of any particular borrower qualifies for forgiveness.
The information provided is intended for informational use only and is subject to change.
Best Practices on the Path To Forgiveness
The information provided is intended for informational use only and is subject to change.
Resources And Helpful Links
There is a lot to understand about the SBA’s PPP loan forgiveness, especially as information changes.
PPP Loan Forgiveness Resources
- PPP Loan Forgiveness Resources Information Page
- Monit, A Free Financial Assistant To Help Track PPP-Related Expenses
- Email Eastern at PPPinquiry@easternbank.com (this dedicated e-mail address is staffed by bankers who can assist with questions during regular business hours)
Government Resources
- U.S. Department of the Treasury CARES Act Information Site for Small Businesses
- U.S. Small Business Administration Paycheck Protection Program
- U.S. Small Business Administration Covid-19 Relief Options and Additional Resources
- U.S. Small Business Administration Economic Injury Disaster Loan (EIDL) Information on Refinancing with PPP Loan Proceeds
Please visit SBA.gov or Treasury.gov for any updates.
Be Aware of COVID-19 Scams
Please be alert – scammers attempt to take advantage of events like this to perpetrate fraudulent activity. Therefore now more than ever, we encourage you to remain vigilant at this time to protect yourself.
Always obtain your information from credible sources and if you are unsure of the source, do not take any action.
If you are a PPP loan customer:
• Any Small Business Administration (SBA) loan is publicly available information. This means your name, address and loan guarantor are easily searchable by fraudsters.
• The SBA may be contacting PPP loan recipients directly as part of its own guidelines. If you are contacted by the SBA directly, notify your Eastern banker immediately for assistance and before providing any information.
• There are reports of phishing activities around PPP loans and fraudsters appearing as the SBA.
Helpful links:
• Federal Trade Commission (FTC)
• U.S. Department of the Treasury
• Federal Bureau of Investigation (FBI)
• SBA Programs – Scams and Fraud Alerts
The information provided is intended for informational use only and is subject to change.