Todd Ziegler
As Republic Bank’s Central Kentucky Market President, I am proud and thankful that we have been able to secure nearly $50 million in loans for over 475 Central Kentucky businesses through the Small Business Administration (SBA) Paycheck Protection Program (PPP). I am very proud of the dedication of Republic Bank’s associates who worked long hours to help businesses in our community obtain these needed loans, and thankful for the opportunity to help current bank clients and new customers that came to us for PPP assistance.
At this time, we have been heavily involved working with Kentucky and other state SBA offices, as well as National Association of Government Guaranteed Lenders (NAGGL) to implement the forgiveness phase of the PPP to assist our clients. The PPP requires that borrowers apply for forgiveness through the bank that gave them the PPP loan. It is important for Republic Bank and other lenders to have a strong working knowledge of the program and its ongoing changes as they happen.
Currently, the forgiveness process shall begin on July 1. An initial form of forgiveness application was developed by the SBA and there have been recent changes to simplify that application, as well as changes in the covered period for use of the loan proceeds, and changes to the forgiveness percentages for approved payroll and non-payroll expenses, from 75 percent payroll/25 percent non-payroll to 60 percent/40 percent, respectively. In addition, certain members of Congress are considering the creation of a “PPP Forgiveness EZ form” and a scaled-back process for PPP loans under $250,000. That has not been approved or finalized, but Republic believes it is possible and would be welcome relief for smaller businesses and individual borrowers. That and other changes may be forthcoming before final implementation of the overall forgiveness process.
Ultimately, Republic believes that since the SBA and Congress have more time to plan, the PPP forgiveness process will be simpler and logical in its final format, but know that many businesses will still require assistance from banks and/or similar professional organizations to fully complete the process. There are many CPA firms and some IT companies building programs to aid banks and borrowers with the process.
While all of the final pieces are worked out between Congress, Treasury and the SBA, PPP borrowers should be prepared with the following:
• Documentation of payroll expenses (gross wages and benefits similar to information submitted in the application). Using payroll software to provide this information might be the easiest method, but documentation from government payroll forms (IRS Form 941) will work. Please discuss with your accounting or bookkeeper professional.
• Documentation of allowable non-payroll expenses such as rent or lease expense, utilities, and interest on allowable loans.
• Documentation of the number of employees based on the full-time equivalency factors required by the SBA, with the actual amount paid during the covered period, during the time period the borrowed funds were fully disbursed.
This preparedness will make things smoother once the process is finalized.
We are proud to serve our communities in this time of need to make this process easier, and we look forward to partnering with Kentucky businesses in the future to restart our economy and help many people get back to work.