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Paycheck Protection Program (PPP)

How American Bank will be handling the second round of PPP Funding. 

In an announcement on Friday, January 8, 2021 and separate message Sunday, the SBA and the PPP loan portal will open on Monday, January 11th for new borrowers and on Wednesday, January 13th for second-draw borrowers. The portal will only be open to certain community financial institutions on these dates. Community financial institutions are defined as Treasury-certified Community Development Financial Institutions, FDIC-designated Minority Depository Institutions, Certified Development Corporations, and certain non-profit or governmental microloan intermediaries. Unfortunately, American Bank is not considered a community financial instituiton. According to SBA, the PPP will open to all remaining participating lenders shortly thereafter, however the specific date is unknown at this time. 

What do we know about the second round of PPP?

American Bank will be participating in this second round of funding. Once the accepting process of PPP loan applications begins, we will be using a new online application portal that will let you submit your application and track the progress of your loan. We believe that the approval process will begin sometime in the next week.

What are the options of PPP funding?

There are two different paths to PPP funding.

  1. If you have not previously taken a PPP loan:  You will be able to apply for a PPP loan using PPP loan criteria and terms from previous funding rounds. This information can be found here.
  2. If you want a second PPP loan: “Second draw” PPP loans, as they are known, have new eligibility requirements intended to assist smaller businesses that were hard hit by COVID restrictions. Generally, businesses that have 300 employees or fewer and demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020 are eligible to apply. Loan amounts are equal to 2.5 times monthly payroll up to $2 million. Certain industries, such as hotels and restaurants (or all NAICS codes starting with 72), can request loan amounts equal to 3.5 times monthly payroll up to $2 million. Additional information can be found here

What do I do if I plan to apply for PPP funding with American Bank?

Make sure your current email address and authorized signer information is up-to-date in our records. You can contact American Bank to confirm we have your current information. This will help streamline your application process. For now, we will accept PPP loan applications only from existing customers.

What key dates should I be aware of? 

The new law requires the SBA to share final rules with banks and other financial institution on the following schedule:

  • Second draw loans: Final rules by January 6, 2021
  • Forgiveness applicants with existing PPP loans of $150,000 or less: Final forgiveness one-page certification form by January 19, 2021

The dates above represent the dates financial institutions, including American Bank, expect the final rules from SBA. We will use the SBA information to program and prepare our application portal so that we can begin accepting application as soon as possible following receipt of the final rules.

What are the Eligible Expenditures of PPP loan funds?

Eligible expenses continue to be 60% payroll and 40% non-payroll for both first-draw and second-draw PPP loans. However, eligible non-payroll expenses have been expanded to now include certain business software or cloud computing services, certain uninsured property damage costs from public disturbances during 2020, certain supplier costs, and certain worker protection expenditures.

Clarification of PPP tax treatment

The law includes clarification regarding taxes and eligible expense and forgiveness. We recommend that you contact your tax adviser or accountant for more details.

When will the funds run dry?

We are unable to predict how quickly the funds may be exhausted. However we do expect demand to be high. We know that, per the law, the PPP program will end on March 31 and all loan applications must be approved by the SBA on this date, if funds remain.

How quickly will my loan be funded after I apply?

SBA is processing these applications differently than they did in 2020. It is anticipated after an application is submitted, it may take a few days for SBA to approve the loan, which needs to be done prior to a financial institutions funding loans to borrowers. 

Update to Economic Injury Disaster Loan (EIDL) Advance

The law provides that EIDL loan advances will no longer be deducted from PPP loan forgiveness. If you have already completed forgiveness of your PPP loan, the law states you must be retroactively made whole. If you are an American Bank PPP customer in this situation we will be in contact with you once we know more.

We understand that PPP loans are a vital lifeline to businesses during the pandemic. We are committed to keeping you informed, and we will update this page regularly.

Updates to PPP Forgiveness

The new law includes modifications to PPP loan forgiveness that may benefit many borrowers. Here are key updates:

PPP loan amounts of $150,000 or less: The new law calls for a streamlined loan forgiveness application that is limited to a one-page certification form that does not require documentation be submitted with your application. Once we’ve applied these changes to our application portal, we will notify customers when we will begin accepting forgiveness applications.

PPP loan amounts of more than $150,000: There are no significant forgiveness changes included in the new law, except for the inclusion of additional non-payroll costs for which PPP funds may be used. We will notify customers once we resume accepting forgiveness applications.

Forgiveness Timing: As a reminder, there is still no rush to apply for loan forgiveness. Your business has up to 24 weeks (known as the Covered Period) to spend PPP loan funds. Also, the deferral period for payments of principal and interest for PPP borrowers who have not yet applied for forgiveness does not end until 10 months after the end of the Covered Period.

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