First Republic Bank (san Francisco, California) · OTC:FRCB
First Republic Bank (san Francisco, California) — First Republic Bank — PPP Loan Forgiveness Client Webinar (April 2021)
44 slides from First Republic Bank (san Francisco, California)'s conference presentation, Apr 28, 2021
Slide 1: Takeaways: Loans of $150,000 and Below
Takeaways Loans of $150,000 and Below Submit your Round One application as soon as possible. This will allow necessary time to receive a final SBA decision before your first payment become due this August or September on any PPP Round One loan amount not forgiven by the SBA. Please dedicate a few mi
Slide 2: Paycheck Protection Program (PPP): Updates on loan forgiveness
Paycheck Protection Program (PPP) Updates on loan forgiveness PPP loans $150,000 and below April 28, 2021
Slide 3: Disclaimer
Disclaimer • This presentation is provided solely for the purpose of enhancing general knowledge on the Paycheck Protection Program (PPP). It does not take into account any specific individual or entity’s facts and circumstances and is not intended and should not be relied upon as any professional a
Slide 4: Milestones and timeline
Milestones and timeline Page 4 Subject to change based on further congressional action, regulatory action or further guidance from the SBA or Department of the Treasury.
Slide 5: General loan forgiveness milestones and timelines
General loan forgiveness milestones and timelines The general timeline below provides key milestones relating to the PPP loan. The dates for each milestone will vary from one Borrower to another based on the Borrower’s PPP loan disbursement date, the applicable Covered Period, and the date when the
Slide 6: Loan forgiveness overview
Loan forgiveness overview Page 6 Subject to change based on further congressional action, regulatory action or further guidance from the SBA or Department of the Treasury.
Slide 7: Loan forgiveness overview
Loan forgiveness overview Borrowersare eligible for forgiveness up to the full amount of the principal amount and any accrued interest.However, the actual forgiveness amount may not necessarily be 100% of the PPP loan amount received. Limitations provided by SBA rules and regulations Loan forgivenes
Slide 8: Loan forgiveness overview (cont.)
Loan forgiveness overview (cont.) Borrowersare eligible for forgiveness up to the full amount of the principal amount and any accrued interest.However, the actual forgiveness amount may not necessarily be 100% of the PPP loan amount received. Limitations provided by SBA rules and regulations The Cov
Slide 9: Use of loan proceeds to satisfy forgiveness
Use of loan proceeds to satisfy forgiveness Page 9 Subject to change based on further congressional action, regulatory action or further guidance from the SBA or Department of the Treasury.
Slide 10: Use of loan proceeds to satisfy loan forgiveness
Use of loan proceeds to satisfy loan forgiveness Loan proceeds must be used for certain expenses paid or incurred inconnection with the Borrower’s trade or business during the Covered Period. 60% 40% At least 60% of loan proceeds must No more than 40% of loan proceeds may be used for be used for pay
Slide 11: Use of loan proceeds to satisfy loan forgiveness (cont.)
Use of loan proceeds to satisfy loan forgiveness (cont.) Noncash compensation: Loan proceeds must be used for certain expenses paid or incurred inconnection • Employerwith the Borrower’s contributions trade for employee orhealth, group business during the Covered Period. life, disability, vision or
Slide 12: Use of loan proceeds to satisfy loan forgiveness (cont.)
Use of loan proceeds to satisfy loan forgiveness (cont.) Loan proceeds must be used for certain expenses paid or incurred inconnection with the Borrower’s trade or business during the Covered Period. Business mortgage interest paid or incurred Business rent or lease payments paid or during Covered P
Slide 13: Use of loan proceeds to satisfy loan forgiveness (cont.)
Use of loan proceeds to satisfy loan forgiveness (cont.) Covered property damage costs incurred during Covered Period. paid or (costs related to property damage and vandalism or looting due to public disturbances that occurred during 2020 and were not otherwise covered by insurance)during the Covere
Slide 14: Loan forgiveness concepts
Loan forgiveness concepts Page 14 Subject to change based on further congressional action, regulatory action or further guidance from the SBA or Department of the Treasury.
Slide 15: Loan forgiveness concepts
Loan forgiveness concepts General requirements for loan forgiveness * Reductions in loan Exemptions to reductions forgiveness amounts Reductions in full-time Reductions in salary and FTE reduction Salary and wage reduction equivalent (FTE) wages safe harbors 1 and 2 safe harbor employees Forgivable
Slide 16: Loan forgiveness concepts (cont.)
Loan forgiveness concepts (cont.) Reductions in FTE employees and wages paidduringthe General requirements for loan forgiveness Covered Period will result inreductions in the loan forgiveness amounts. Reductions in loan Exemptions to reductions forgiveness amounts* Reductions in full-time Reductions
Slide 17: Loan forgiveness concepts (cont.)
Loan forgiveness concepts (cont.) General requirements for loan forgiveness Three safe harbors available to borrowers to claim exemptions from any reductions in their forgiveness amounts due to reductions in FTE and salary/wages. Reductions in loan Exemptions to reductions * forgiveness amounts Redu
Slide 18: Loan forgiveness calculation
Loan forgiveness calculation Page 18 Subject to change based on further congressional action, regulatory action or further guidance from the SBA or Department of the Treasury.
Slide 19: Loan forgiveness application form (SBA Form 3508S or lender equivalent)
Loan forgiveness application form (SBA Form 3508S or lender equivalent) A Borrower can use the Form 3508S if the Borrower received a total PPP loan amount that was $150,000 or less for an individual First or Second Draw PPP Loan. • Does not require borrowers to show calculations used to determine fo
Slide 20: Loan forgiveness calculation starting point
Loan forgiveness calculation starting point • Payroll costs are eligible for forgiveness if paid during the Covered Period. • Payroll costs incurred but not paid during the Borrower’s last pay period of the Covered Period are also eligible for forgiveness if Payroll paid on or before the next regula
Slide 21: Loan forgiveness calculation (loans greater than $50,000 up to $150,000)
Loan forgiveness calculation (for loans greater than $50,000 up to $150,000) Payroll costs Forgiveness amount is smallest of: Total payroll and Total salary/hourly FTE reduction Modified total nonpayroll costs wage reduction quotient Non-payroll costs PPP loan amount Payroll cost 60% requirement Pag
Slide 22: Loan forgiveness calculation (loans greater than $50,000 up to $150,000) (cont.)
Loan forgiveness calculation (for loans greater than $50,000 up to $150,000) (cont.) Sum of payroll costs, business mortgage interest payments, business rent or lease payments, business utility payments, covered operations expenditures, property damage Percentage reduction in FTEs during the costs,
Slide 23: Documentation requirements
Documentation requirements Page 23 Subject to change based on further congressional action, regulatory action or further guidance from the SBA or Department of the Treasury.
Slide 24: Loan forgiveness application — documentation considerations
Loan forgiveness application — documentation considerations 2.5x Maximum loan amount Payroll 2019 average monthly at loan origination 10.83 weeks payroll costs documentation Need to spend at least 60% on Payroll + nonpayroll Use of PPP loan proceeds payroll costs. The rest may be (8-Week Covered Per
Slide 25: Borrower considerations to enhance forgiveness experience
Borrower considerations to enhance forgiveness experience • Prepare, collect, and retain required documentation to support forgiveness application: • Payroll reports • Tax forms • Payment receipts Payroll • Canceled checks costs • Account statements FTE levels Expenditures • Invoices, orders, purcha
Slide 26: Client Resources
Client Resources 26 Re source Page B orrower Reference Guides firstrepublic.com/sbappp firstrepublic.com/sbappp For general information about the For step-by-step instructions, Paycheck Protection Program documentation tips and resources Note: These resources will be shared with primary accountholde
Slide 27: Borrower responsibilities
Borrower responsibilities Page 27 Subject to change based on further congressional action, regulatory action or further guidance from the SBA or Department of the Treasury.
Slide 28: Borrower responsibilities
Borrower responsibilities To apply for loan forgiveness, Borrowers are required to submit a complete Loan Forgiveness Application to the lender that is servicing the loan. Borrowers are required to provide an accurate calculation of the loan forgiveness amount and to retain documentation that verifi
Slide 29: PPP loan terms
PPP loan terms Deferral period • If a Borrower submits a Loan Forgiveness Application to its lender within 10 months after the end of the maximum 24 week Covered Period, the Borrower will not have to make any principal payments or interest payments before the date that the SBA remits the loan forgiv
Slide 30: Next steps
Next steps • Log in to First Republic’s Loan Forgiveness Portal, supported by Spark: frb.lendwithspark.com and submit a complete application as soon as possible. • Stay responsive to any follow-up requests provided by First Republic. • Track the status of your application in SPARK. Borrowers should
Slide 31: Thank you
Thank you Page 31 Subject to change based on further congressional action, regulatory action or further guidance from the SBA or Department of the Treasury.
Slide 32: EY | Building a better working world
EY | Building a better working world EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. EY exists to build a better working world, helping create long-term value for clients, Ernst & Young
Slide 33: Important Information on the SBA Paycheck Protection Program Loan Forgiveness
Important Information on the Small Business Administration (“SBA”) Paycheck Protection Program Loan Forgiveness First Republic cannot guarantee forgiveness of your PPP loan, and loan forgiveness is subject in all respects to the Loan For giveness Application and PPP regulations. Forgiveness of your
Slide 34: Appendix
APPENDIX EY Building a better working world
Slide 35: Loan forgiveness concepts details
Loan forgiveness concepts details General requirements for loan forgiveness Loan proceeds must be used for qualified expenses within the Covered Period: • At least 60% of the loan forgiveness amount must be used for eligible payroll costs. • Not more than 40% may be used for payment of eligible nonp
Slide 36: Loan forgiveness concepts details (cont.)
Loan forgiveness concepts details (cont.) General requirements for loan forgiveness • Compare average weekly FTEs in the Covered Period with the following base periods: • Nonseasonal employers: • Option 1: Average weekly FTEs in 2019 (February 15, 2019 to June 30, 2019) Reductions in loan • Option 2
Slide 37: Loan forgiveness concepts details (cont.)
Loan forgiveness concepts details (cont.) General requirements for loan forgiveness Reductions in loan Exemptions to reductions forgiveness amounts Reductions in full-time Reductions in salary and FTE reduction Salary and wage reduction equivalent (FTE) wages safe harbors 1 and 2 safe harbor employe
Slide 38: Loan forgiveness concepts details (cont.)
Loan forgiveness concepts details (cont.) General requirements for loan forgiveness Safe harbor 1: Applicable if Borrower, in good faith, is able to document that it was unable to operate between February 15, 2020 and the end of the Covered Period at the same level of business activity as before Feb
Slide 39: Loan forgiveness concepts details (cont.)
Loan forgiveness concepts details (cont.) General requirements for loan forgiveness Reductions in loan Exemptions to reductions forgiveness amounts Reductions in full-time Reductions in salary and FTE reduction Salary and wage reduction equivalent (FTE) wages safe harbors 1 and 2 safe harbor employe
Slide 40: Loan forgiveness concepts details (cont.)
Loan forgiveness concepts details (cont.) Applicable if both conditions are met: General requirements for loan forgiveness • Borrower reduced the average annual salary or hourly wages paid in the period beginning February 15, 2020, and ending April 26, 2020. • Borrower restored the average annual sa
Slide 41: Payroll costs documentation requirements
Loan forgiveness application — payroll costs documentation requirements Borrowers are not required to submit documentation alongside the Form 3508S; however, a borrower must retain all employment records/payroll documentation in its files for four years and all other documentation for three years af
Slide 42: Non-payroll costs documentation requirements
Loan forgiveness application — non-payroll costs documentation requirements Borrowers are not required to submit documentation alongside the Form 3508S; however, a borrower must retain all employment records/payroll documentation in its files for four years and all other documentation for three year
Slide 43: Payroll costs documentation requirements (cont.)
Loan forgiveness application — payroll costs documentation requirements (cont.) Borrowers are not required to submit documentation alongside the Form 3508S; however, a borrower must retain all employment records/payroll documentation in its files for four years and all other documentation for three
Slide 44: Non-payroll costs documentation requirements (cont.)
Loan forgiveness application — non-payroll costs documentation requirements (cont.) Borrowers are not required to submit documentation alongside the Form 3508S; however, a borrower must retain all employment records/payroll documentation in its files for four years and all other documentation for th
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