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    Understanding your loan forgiveness

    As part of our ongoing commitment to helping small businesses recover, Citizens wants to help you maximize your loan forgiveness opportunity. Below you’ll find information around how to apply for PPP loan forgiveness and helpful resources to help you prepare for forgiveness.

    PPP Latest News and Updates

    June 19th – The SBA and U.S. Treasury announced enhanced transparency regarding the PPP. Specifically, for businesses that received PPP loans in the amount of $150,000 and above, the SBA will disclose additional information. Learn More

    June 5th – The Paycheck Protection Program (PPP) Flexibility Act was signed into law, which makes it easier for many businesses to spend PPP funds in a way that is forgivable. Learn More

    How to Apply for PPP Loan Forgiveness

    PPP Loan Forgiveness

    We have launched our online PPP forgiveness application form and have started to roll it out to customers. In the coming weeks you will receive an email from us about how to access our online application. You will need this email to access the application for the first time.

    If after receiving your invitation you have trouble accessing the application or logging in, please email us at clientservices@citizensbank.com.

    Please note that we will not accept paper or PDF forgiveness applications.

    PPP Forgiveness FAQs

    The following FAQs are based on federal legislation that was enacted into law on June 5, 2020. We anticipate additional guidance from the SBA incorporating these legislative changes. In the interim, this information reflects how we expect this new legislation to affect PPP forgiveness requirements.

    • Are PPP loans eligible for loan forgiveness?

      Yes, PPP loans are eligible for loan forgiveness—meaning you have no responsibility to repay the loan—if the funds are used for certain business expenses. It's also possible to receive forgiveness for a percentage of the loan vs. the entire loan amount. See "Is it possible to have some of my loan forgiven, but not all?" below.

    • What business expenses qualify for loan forgiveness?

      To qualify for loan forgiveness, the funds must be used on one or more of the following expenses billed or incurred in the 24-week period triggered after you received your loan:

      • Payroll costs, including benefits
      • Interest on mortgage obligations, where the mortgage obligations originated before February 15, 2020
      • Rent, under lease agreements in force before February 15, 2020
      • Certain utilities, for which service began before February 15, 2020
    • What counts as a payroll costs?

      Payroll costs include:

      • Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee)
      • Employee benefits, including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits, including insurance premiums; and payment of any retirement benefit
      • State and local taxes assessed on compensation of employees
      • For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee
    • Is it possible to have some of my loan forgiven, but not all?

      Yes. You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 24 weeks triggered after you received the loan. Payroll costs must represent at least 60% or the forgiveness amount.

      You may also owe money if you do not maintain your staff and payroll, such as:

      • Your loan forgiveness may be reduced if you decrease your full-time employee headcount.
      • Your loan forgiveness may also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
      • You may be able to avoid a reduction in forgiveness if you restore your full-time employment and salary levels by December 31, 2020. You may also be able to avoid a reduction in forgiveness if you can document an inability to return to your standard level of business activity due to compliance with COVID-19 requirements or guidance issued by the Centers for Disease Control (CDC) or other specific federal entities.
    • Some of my employees voluntarily resigned, requested a reduction of hours or were fired for cause. Do these situations still count as an FTE reduction?

      No. You do not need to include employees who voluntarily resigned, requested reduced hours, or were fired for cause in your wage reduction calculation, provided you retain supporting documentation. You can also exclude employees who were fired or furloughed where you made a good-faith, written offer to rehire that was rejected by the employee. You may also be able to avoid a reduction in forgiveness if you can document an inability to return to your standard level of business activity due to compliance with COVID-19 requirements or guidance issued by the Centers for Disease Control (CDC) or other specific federal entities.

    • What happens to loan proceeds that are not forgiven?

      Proceeds that are not forgiven must be repaid pursuant to your promissory note, and can only be spent on the following:

      • At least 60% of the loan proceeds must be used for payroll costs.
      • The remaining 40% of loan proceeds may be spread across the following items only:
        • Mortgage interest payments (but not mortgage prepayments or principal payments);
        • Rent payments;
        • Utility payments;
        • Interest payments on any other debt obligations that were incurred before February 15, 2020

      If you use PPP funds for unauthorized purposes, SBA will direct you to repay those amounts. If you knowingly use the funds for unauthorized purposes, you could be subject to additional liability such as charges for fraud.

    • How do I apply for loan forgiveness?

      Citizens will soon send you an email invitation to apply for forgiveness through our application portal. Once you create your login credentials, you will be able to apply for loan forgiveness and submit the required documentation directly through our portal. As part of your application, you must attest to the accuracy of the reported information and calculations of forgiveness.

    • Should my company’s forgiveness application be completed by the same employee who submitted my company’s PPP application?

      An authorized signatory is required to complete the forgiveness application.

    • What other resources can I consult to help with my forgiveness application?

      There are many resources available to help you prepare your forgiveness application. We recommend that you refer to sba.gov and treasury.gov for additional information. You may also want to discuss your application with your CPA.

    • What can I expect after I’ve submitted my application?

      Once you submit your forgiveness application through our portal, Citizens has 60 days to review your application and supporting documents regarding amounts eligible for loan forgiveness. The accuracy and completeness of the information you provide will be key to processing your application as quickly as possible. If we have questions about how your loan forgiveness amount has been calculated, we will contact you directly. Once reviewed, Citizens will send your application to the SBA. The SBA will have 90 days to review and respond to Citizens. You will be notified as soon as we hear from the SBA on your loan forgiveness decision.

    • Do I need to make payments on my PPP loan after I submit my forgiveness application?

      If you apply for forgiveness within 10 months of your 24-week covered period, your loan payments may be deferred until the date the SBA sends your forgiveness payment. Interest will continue to accrue at a rate of 1% during this period.

    • What will happen if the SBA declines my forgiveness application?

      You will be notified if the SBA determines that all or part of your loan is not forgivable. If you do not agree with the SBA’s determination, you may appeal the decision. The SBA will provide more information on the appeal process soon. You will be required to start repaying any portion of your PPP loan that is not forgiven. The loan term will be two years with a 1% interest rate. There is no prepayment penalty.

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