Langley is proud to support our local community by continuing to offer SBA PPP loans for eligible businesses through the deadline of August 7, 2020. We are here to provide support in both applying for new loans as well as beginning the PPP loan forgiveness process.
UPDATES: Langley will begin reviewing PPP Loan Forgiveness Applications on Monday, August 10 which coincides with when the SBA will begin accepting Lender Forgiveness Submissions. More changes and enhancements to the PPP Forgiveness Process are likely in the coming days. As such, Langley is closely monitoring Congress and will keep Members updated on new developments.
On Friday, March 27, the President signed the Coronavirus Aid, Relief and Economic Security Act (CARES Act) that created a new program within the Small Business Administration (SBA) under 7(a) Loan Program called the Paycheck Protection Program (PPP). Under the PPP, the SBA will guarantee specific loans originated by lenders to small businesses that are experiencing economic hardships as a result of the COVID-19 pandemic. The CARES Act initially authorized $349 billion of PPP loans, and that amount was increased to $659 billion by later legislation after the initial round of funding was exhausted. The SBA opened the application process for PPP loans on April 3, 2020 and will continue to guarantee new loans made by lenders through August 7, 2020.
On June 5, 2020, the Paycheck Protection Program Flexibility Act was signed into law that allows for greater flexibility for PPP borrowers. The legislation included extending the forgiveness period from 8 weeks to 24 weeks and also reduced the amount that the business must devote to payroll from 75% to 60%, among other changes. We are closely following the actions of Congress, the SBA, and the U.S. Treasury Department for additional changes as they occur.
For a full description of the terms and conditions governing PPP loans, including the loan’s interest rate, maturity, and conditions for forgiveness, please visit the SBA’s PPP page. If you have questions about PPP loan requirements, please consult with your attorney, accountant, or financial advisor for assistance. Langley will continue to take new applications through the August 8 deadline.
PPP loans can potentially be forgiven in-part or in-full.
The program dictates that loan amounts will generally be forgiven as long as the loan proceeds are used to cover eligible payroll costs and most mortgage interest, rent, and utility costs over the Covered “Forgiveness” Period after the loan is made. A loan may be fully forgiven if all of the following three conditions are met:
Maturity Date and Deferral Period:
Timing for Loan Forgiveness:
Review your staffing requirements:
Q. When can I start my forgiveness application?
A. Langley will begin taking applications on Monday, August 10, 2020 which coincides with the date that the SBA begins to accept forgiveness submissions from Lenders.
Q. When is the deadline to submit my forgiveness application?
A. A borrower may submit a loan forgiveness application any time on or before the maturity date of the loan – including before the end of the covered period – if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness (any remainder must be returned to Langley).
If the borrower does not apply for loan forgiveness within 10 months after the last day of the Covered Period, or if SBA determines that the loan is not eligible for forgiveness (in whole or in part), the PPP loan is no longer deferred and the borrower must begin paying principal and interest payments.
Q. How do I apply?
A. When it is time and you are ready to submit for forgiveness, you will need to have ready the correct form 3508 or 3508EZ forgiveness application as well as any applicable documentation that you are required to submit in connection with your application’s instructions. Completed PPP Loan Forgiveness Applications and supporting documentation can be emailed to us directly at [email protected].
Q. What do I do if I have questions while filling out my forgiveness application?
A. Please consult with relevant advisors, such as your attorney, accountant, and financial advisor, as you prepare for this next step in the PPP process so they can help with any questions or concerns before submitting.
Q. How long is my Covered “Forgiveness” Period?
A. The Flexibility Act extended the length of the Covered Period from eight to 24 weeks, while allowing borrowers that received PPP loans before June 5, 2020 to elect to use the original eight-week covered period. The Covered Period starts either the date your funds were disbursed OR the first day of your first pay period following your disbursement date. (Note: Your disbursement date may not necessarily be the date on which you signed the Promissory Note.)
Q. Am I eligible to use the simplified Form 3508EZ?
A. You can submit Form 3508EZ if:
Q. How long does the forgiveness process take once I’ve submitted my application?
A. Rest assured that while we will do our best to process all forgiveness applications in a timely manner, the SBA has established that the lender (Langley Federal Credit Union) has 60 days from receipt of the completed application to review and provide an initial decision and then the SBA will have 90 days after that to review and accept the application and remit the appropriate forgiveness amount, unless the SBA requires additional review of the loan.
Q. Do I have to make payments on my loan if the forgiveness process is not yet complete?
A. No. Under the Flexibility Act, payments are deferred until the SBA has made a final decision on your forgiveness application and remitted that amount to Langley Federal Credit Union.
If you don’t apply for forgiveness within 10 months of the last day of the Covered Period, however, you will have to begin making payments of principal, interest, and fees. At that point, the terms of your promissory note will be updated to reflect updated terms.
For additional information, please refer to the U.S. Department of the Treasury’s CARES Act Assistance for Small Businesses website or the SBA's dedicated PPP website. You may also contact one of Langley’s Commercial Loan Officers by calling 757.224.4777 or emailing us at [email protected].
In the event of any discrepancies between the information on this site and the SBA’s site, please follow the official SBA guidance.