American Savings Bank, N.a. · NYSE:ASBH
American Savings Bank, N.a — American Savings Bank — Preparing for PPP Loan Forgiveness webinar (September 2020)
28 slides from American Savings Bank, N.a's conference presentation, Sep 17, 2020
Slide 1: Preparing for PPP Loan Forgiveness 3508 EZ/3508 Application
9/17/2020 Welcome The webinar will begin shortly Preparing for PPP Loan Forgiveness Cynthia Yamasaki SBA Lori Hiramatsu VBOC 1 Preparing for PPP Loan Forgiveness 3508 EZ/3508 Application Lori Hiramatsu, VBOC of the Pacific Cynthia Yamasaki, SBA Hawaii District Office Julie Percell, SBA Hawaii Distri
Slide 2: Agenda
9/17/2020 Start. Grow. Expand. Recover. SBA was created in 1953 as an independent agency of the federal government to support small businesses and entrepreneurs to start, grow, expand, and recover their businesses and the overall economy. SBA Partners SBA Lenders Federal Government Contracts 3 3 AGE
Slide 3: PPP Forgiveness Process and Application Forms
9/17/2020 1 Borrower has 8 or up to 24 weeks to 2 Submits application and required use PPP funds (covered period) info/docs to PPP Lender (within 10 months from end of covered period) 11/01/2020 – CP ends • 3508 EZ 10/01/2021 - deadline to • 3508 submit to lender • Lender's form PPP Forgiveness Proc
Slide 4: Borrower Forgiveness Application Submission FAQ
9/17/2020 Borrower Forgiveness Application Submission FAQ Question: Who can use the SBA Form 3508EZ forgiveness application? Answer: (See Form 3508EZ instructions, page 1) 1) Self-employed individual, independent contractor, or sole proprietor who had no employees at the time of the PPP loan applica
Slide 5: Employee Reduction Exemptions
9/17/2020 Employee Reduction Exemptions For any employee during the Covered and Alternative Covered Period: • If furlough or lay-off • Borrower made a good-faith, written offer to rehire the employee, and it was rejected by the employee • Voluntarily requested and received a reduction of their hours
Slide 6: PPP Forgiveness Additional Criteria
9/17/2020 PPP Forgiveness Additional Criteria In business prior to 2/15/20 Payroll for employees who reside in the United States Mortgage, leases, business utilities in place prior to 2/15/20 Must apply for forgiveness within 10-months from the end of the covered period or alternative covere
Slide 7: Owner-employees & Self-employed Cash Compensation Caps
9/17/2020 Owner-employees & Self-employed Type of Business - Legal Entity Forgivable Compensation C-corporation – owners are on payroll as an Employee cash compensation, retirement, and employee health insurance contributions paid by employer/borrower S-corporation – 2% or more ownership Cash compen
Slide 8: Forgivable Nonpayroll Expenses
9/17/2020 Payroll CostConsiderations Timing: To be eligible for forgiveness, payroll costs must be: 1. Incurred or paid during the Covered Period or Alternative Payroll Covered Period and cannot exceed 12/31/20. 2. Incurred before the Covered Period or Alternative Payroll Covered Period but paid dur
Slide 9: Home-Based Business Costs and Mortgage Interest and Rent Criteria
9/17/2020 What nonpayroll costs are allowed for a home-based business? The borrower may include only the share of covered expenses that were deductible on the borrower’s 2019 tax filings, or if new business, the borrower’s expected 2020 tax filings. It does not include household expenses (IFR 8/24/2
Slide 10: Related Business & Property Owner Guidelines
9/17/2020 Example for #2 Assumptions: • Total rentable sq. ft.: 5,000 • Leased space rent: $4,000/mo. • Borrower’s mortgage interest for the covered period: $7,000 • FMV: $2/sq. ft.(avg. based on 2 sources) Calculation: FMV total: 5,000 sq. ft. x $2 = $10,000 Leased space rent: $4,000 represents 40%
Slide 11: Borrower Documentation Requirements
9/17/2020 Borrower DocumentationRequirements What documentation does the borrower submit to the lender with its forgiveness application? In addition to the signed Forgiveness Application Form (SBA Form 3508, 3508EZ, or lender equivalent) borrowers are generally expected to submit the following (see
Slide 12: Non-Payroll Documentation and 3508 EZ Application
9/17/2020 Borrower Documentation – Non-Payroll Documents Must Provide Proof of Eligible Costs Verify existence of eligible non-payroll obligations/services prior to February 15, 2020 and eligible payment during the Covered Period with the following if borrower includes nonpayroll expenses in the amo
Slide 13: 3508 EZ Form - Page 1
9/17/2020 3508 EZ Form- Page 1 Ensure info matches your PPP $12,500 app and lender docs Include EIDL info, if applicable 25 Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information. 25 Covered Periods (page 1) 1. Covered Period (8 weeks = 56 days) Maybe applied on
Slide 14: 3508 EZ Form - Page 1 continued
9/17/2020 3508 EZ Form (page 1 cont.) Payroll and Non-Payroll Costs / Forgiveness Cal. 27 Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information. 27 3508 EZ Form Eligibility #1- Self Employed, Independent Contractor, Sole-Proprietor – No Employees From 2019 SCH
Slide 15: Eligibility #2 - No Change in Salary > 25% and Employees
9/17/2020 3508 EZ Form Eligibility #2- No Change in Salary > 25% AND # Employees Assumptions: All employees of company 1. 8-week covered period; employees paid weekly 2. Reduced hours and salary in weeks 2 and 3 not less than 25% 3. One employee resigned; replacement hired and retained during covere
Slide 16: Eligibility #3 - Unable to Operate Due to COVID-19 Mandates
9/17/2020 3508 EZ Form Eligibility #3 - No Change in Salary/Hr. Wages > 25% AND Unable to Operate Due to COVID19 Mandates Assumptions: 1. Restaurant unable to fully operate due to COVID19 mandates and able to offer only take outs 2. 24-week covered period; employees paid on 15th and 30th of every mo
Slide 17: Eligibility #3 Outcome and EIDL Advance
9/17/2020 What will happen under eligibility #3? (PPP loan more than the eligible forgiveness amount) PPP Loan $ 75,000 Forgiveness $ 69,000 Difference $ 6,000 PPP Loan • Before June 5: 2-year term @ 1% • After June 5: 5-year term @ 1% • Payments deferred for 6 months What if the Borrower received a
Slide 18: Submit all required documentation
9/17/2020 Read Carefully Submit all required documentation (Retain copies for your records) 35 DOCUMENTATION CHECKLIST Payroll & related taxes, benefits paid by employer Receipts for allowable nonpayroll costs paid during covered period Written job offers and refusals, refusals to accept resto
Slide 19: 3508EZ vs 3508 and Safe Harbor Criteria
9/17/2020 3508EZ vs 3508 (revised 6/16/20) PPP Schedule A Worksheet for payroll, nonpayroll costs, FTE Reduction Calculation, Safe Habor 1 & 2 Table 1: employee name, ID, annual cash compensation under $100,000 Table 2: employee name, ID, annual cash compensation $100,000 or more Average Full-Ti
Slide 20: 3508 Required FTE Calculation
9/17/2020 PPP Loan Forgiveness Instructions Page 4 AVERAGE FTE Information Current as of 9/3/20 – Visit www.sba.gov/ppp for 39 the most up-to-date information. 39 3508 Required FTE Calculation Full-time Equivalency (FTE) Calculation (Two ways) For each employee: • Take the average number of hours pa
Slide 21: 3508 PPP Loan Forgiveness Application - Page 1
9/17/2020 3508 PPP Loan Forgiveness Application (revised) - Page 1 (From your EIDL Application) Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information. 41 41 3508 PPP Loan Forgiveness Application (revised)- Page 1 Covered Period or Alternative Covered Period Int
Slide 22: 3508 Application - Pages 2 and 3
9/17/2020 AM 3508 PPP Loan Forgiveness Application AM Form (revised) AM AM Page 2 AM AM AM AM Allison Marley As soon as possible after funds are spent Information Current as of 9/3/20 – Visit www.sba.gov/ppp for 43 the most up-to-date information. 43 PPP Loan Forgiveness Application (revised) - Page
Slide 23: 3508 Application - Page 4 Schedule A Worksheet
9/17/2020 3508 PPP Loan Forgiveness Application Form (revised) Page 4 (Schedule A Worksheet) 45 45 3508 PPP Loan Forgiveness Application (revised) - Page 4 (Schedule A Worksheet, Table 1 & 2) Add additional sheets as needed for all employees Information Current as of 9/3/20 – Visit www.sba.gov/ppp f
Slide 24: PPP Loan Forgiveness Instructions Page 5
9/17/2020 3508 PPP Loan Forgiveness Application Form (revised) Page 5 Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information. 47 47 PPP Loan Forgiveness Instructions Page 5 48 48 24
Slide 25: Key Points for Borrowers
9/17/2020 3 KEY POINTS FOR BORROWERS PREPARE FOR APPLICATION • Read the Application Instructions • Gather information and calculate expenditures • Fill out form CONTACT YOUR LENDER • Review lenders’ guidelines, check website • Gather supporting documentation • Submit Forgiveness Application to Lende
Slide 26: Treasury.gov Resources
9/17/2020 Treasury.gov Click on Assistance for Small Business 51 Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most up-to-date information. 51 Treasury.gov More PPP Information and FAQs Certify Knowledge Base 52 Information Current as of 9/3/20 – Visit www.sba.gov/ppp for the most
Slide 27: SBA Resource Partners - Hawaii
9/17/2020 SBA RESOURCE PARTNERS - HAWAII Small Business Development Center Oahu, Kauai, Maui, East Hawaii, West Hawaii hisbdc.org Patsy T. Mink Center for Business & Leadership Oahu mcblhawaii.org Veterans Business Outreach Center of the Pacific hilo.hawaii.edu/vboc/ SCORE score.org Lori Hiramatsu,
Slide 28: sba.gov/hi
9/17/2020 sba.gov/hi cynthia.yamasaki@sba.gov josette.mueller@sba.gov Hawaii (808) 460-8967 Guam (671) 472-7244 55 55 28
American Savings Bank — Preparing for PPP Loan Forgiveness webinar (September 2020) on 6ix