Dear Paycheck Protection Program Loan Customer,
On behalf of Sonabank, we want to thank you for choosing us to help you with your recent PPP loan. We know this has been a stressful time and we are thankful for your business. There are numerous questions around the forgiveness of the PPP loan and we wanted to keep you informed of the guidelines concerning your loan.
At this time, the SBA has not issued final guidance on all the details surrounding PPP loan forgiveness. There are questions that still need to be answered and you can be assured that your bankers are seeking clarity. However, we wanted to take the opportunity to remind you of some key points as we understand them today, May 13, 2020.
PPP forgiveness criteria may change during your 8 week covered period. Sonabank will follow the protocol set forth by the SBA as it pertains to your PPP Loan.
The SBA recently clarified that the 8-week period begins on the date you received the disbursement of the loan. The CARES Act states that during your 8 week period the sum of the following costs incurred and payments made will be eligible for forgiveness:
- Payroll costs
- Any payment of interest on any mortgage obligation (not including any prepayment of or payment of principal on a mortgage obligation) that was incurred before February 15, 2020,
- Any payment of rent under a leasing agreement in force before February 15, 2020,
Any utility payment, including payment for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020.
In recent guidance, the SBA stated that no more than 25% of the forgivable amount of a PPP loan can be attributable to non-payroll costs. Payment is deferred for 6 months on your PPP loan. Any portion of a PPP loan that isn't forgiven must be repaid over the remaining 18 months at an interest rate of 1%.
Since information and guidance on PPP loan forgiveness is still evolving, we are encouraging our clients to visit the Department of the Treasury website for the latest information. Your lender will be in touch with you closer to the end of the 8 week period to discuss next steps. We expect some or all of the following documentation will be necessary to process the forgiveness:
- Payroll reports with corresponding bank statements or cancelled checks
Documentation in the form of canceled checks, payment receipts, and bank statements showing payment of the following items from the date of funding through the following 8 weeks.
- Mortgage Interest
- Rent Payments
For questions about payments or payoffs on your PPP loan, please contact your local branch or our Customer Care Center at 888.464.2265.
Again, we thank you for choosing Sonabank as your PPP loan provider. If there is anything additional we can do to help you through this difficult time, please let us know. Be well.
Dennis Zember Jr.
President and CEO