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See info below on the PPP Loan Application and Forgiveness Process.

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Congressional Summary December 21, 2020

SBA Information on the PPP

SBA PPP FAQs

U.S. Chamber of Commerce Small Business Guide Checklist for Emergency LoansPDF Download

SBA Paycheck Protection Program

SBA Economic Injury Disaster Loan - Apply directly with the SBA

SBA Disaster Loan Assistance

Washington State Employment Security Department

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December 22, 2020

With the Congressional stimulus package including Small Business Administration (SBA) Paycheck Protection Program (PPP) loans about to be approved and implemented, we want you to know that we will be accepting applications for PPP loans just as soon as we have enough information from the SBA to begin.

Once the stimulus package has been enacted, the SBA is allowed ten days to issue regulations, so we do not yet have a specific date the program will be opened. However, rest assured the same systems and people will be in place to ensure that we can respond as effectively as we did earlier in the year.

In addition to emailing you, we will post information to coastalbank.com as soon as we receive it, including links to applications and PPP details.

The Act also provides for a simplified PPP Forgiveness form for loans up to $150,000 and we will share that once it is released. Borrowers will still be required to maintain their documentation (Payroll four years, other expenses three years). The Act does allow the SBA 24 days to create this new Forgiveness application.

We are maintaining a separate email list of customers who received a PPP loan earlier in the year and will be applying for this next round of PPP so that we provide relevant information tailored to these borrowers separate from customers who are first time PPP applicants. 

If you have reached out to your Coastal banker we will already have you on that list; if not, please contact your Coastal banker or reply to this email and we will add you to our Round 3 list. 

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December 9, 2020

Caution with vendors advised

With the recent court-ordered disclosure of the identities of business owners who took Paycheck Protection Program (“PPP”) loans, some of our customers are seeing an increase in vendors contacting them to solicit their business for forgiveness loan support. 

In some cases, these vendors have falsely advised customers that these agents are needed to complete the forgiveness documentation and that the bank will pay the fee.

Should you find you need assistance in completing the application or gathering documentation, we recommend that you reach out to trusted advisors such as your accountant, bookkeeper, or attorney. 

However, we strongly encourage you to use caution when you are solicited by providers you are not familiar with. In addition to giving you false information, sharing your files with unknown “vendors” could open you to fraud.

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Below is a list of suggested documentation to maintain against the unlikely event of governmental enforcement action.  

  1. Document the reason why you needed a PPP Loan. This can include, but is not limited to:
    1. What were the financial projections at the time of the application?
    2. Was the business closed as a result of a state -order?
    3. Statement of Cash Flow, Balance Sheet, Income Statement supporting that the company financial position was deteriorating during the time of application.
    4. For public companies, any relevant disclosures to the SEC, especially those disclosures that indicate an inability to continue as a going concern. 
  • How many employees were on payroll at the time of the application?
    1. When submitting the application, were your employees at risk of being fired or their salary or hours reduced?
    2. Had you laid off staff, or were you preparing to do so?
  1. Did you have access to funds or other loans on reasonable terms during the time of application?

It is recommended that you retain these documents along with both your complete original PPP Application, as well as your Forgiveness Application.

According to the SBA, all records relating to the Borrower’s PPP loan, including:

  • documentation submitted with the PPP loan application
  • documentation supporting the borrower’s certifications as to the necessity of the loan request and its eligibility for a PPP loan
  • documentation necessary to support the borrower’s loan forgiveness application
  • documentation demonstrating the borrower’s material compliance with PPP requirements must be retained for six years after the date the loan is forgiven or repaid in full, and permit authorized representatives of SBA, including representatives of its Office of Inspector General, to access such files upon request. 

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Information on SBA Disaster Loans for COVID-19

What does the new SBA disaster assitance mean for businesses in Washington?

New federal legislation and appropriations has opened up the possibility for small businesses to receive assitance for econominc loss due to COVID-19. Details of eligibity and administration of this assitance from SBA are still being addressed by the SBA. Information can be found here Three Step Process SBA Disaster Loans and here SBA information on Coronavirus Assistance.

Businesses must apply directly with the SBA either 1) online; 2) in-person at a disaster assistance center; or 3) by mail.  If the borrower has an existing SBA loan with Coastal Community Bank the borrower can contact the Bank to see what can be done. The link to the site is here SBA.     

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SBA Preferred Lending Partner

As an SBA Preferred Lending Partner, our decisions are made locally, which means faster answers for you. Our experienced staff will help you determine if an SBA Loan is right for you.

  • Ideal for purchasing and refinancing existing businesses
  • Government-assisted help for businesses that might otherwise have difficulty getting approved
  • Special financing for qualifying businesses
  • Competitive rates for a wide range of business needs:
    • Commercial real estate purchase
    • Construction
    • Business acquisition or expansion
    • Equipment/inventory purchase
    • Working capital
    • And more
  • Lending options available for start-up businesses
  • Quick, local decision-making and processing
  • Attentive, friendly service from start to finish

Resources

The Small Business Administration in partnership with SCORE offers detailed information on starting a business, financing and managing. Their website, SBA.gov, is an excellent resource regardless of whether you are considering SBA Loans or looking for more information on running a business.

 

Should you have additional questions regarding PPP loan forgiveness, please contact your local Coastal banker or reach out directly to the PPP Support Center at 425.349.9097 or [email protected]

SBA PPP Loan Forgiveness FAQs

SBA PPP Forgiveness Factsheet

PPP Forgiveness FAQs

Forgiveness Checklist for Borrowers

Loan Forgiveness Calculators:

Loan Forgiveness Application Form EZ

Loan Forgiveness Application Form 3508S

Loan Forgiveness Application Form 3508

Loan Forgiveness Application Submission: Click here to upload files securely.

PPP Interim Final Rule - Loan Forgiveness Requirements and Loan Review Procedures as Amended by Economic Aid Act

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October 28, 2020

PPP Ownership Changes Update and an Overview of Forgiveness Applications

Earlier this month, the Small Business Administration (SBA) issued guidance regarding changes of ownership for businesses with Paycheck Protection Program (PPP) loans.

Additionally, we know that the different types of forgiveness applications for the PPP program might be confusing, so we have included an outline that should help you determine which application is appropriate for your situation.

CHANGES OF OWNERSHIP

If you are in the process of or are contemplating a change of ownership in your business, please notify the bank immediately. 

On October 2, 2020 the SBA released Procedural Notice 5000-20057 PPP Loans and Changes of Ownership. The purposes of the PPP, a “change of ownership” is considered to occur when (1) at least 20% of the common stock or other ownership interest of a PPP borrower is sold or otherwise transferred, whether in one of more transactions, including to an affiliate or an existing owner of the entity, (2) the PPP borrower sells or otherwise transfers at least 50% of its assets (measured by fair market value), whether in one or more transactions, or (3) a PPP borrower is merged with or into another entity. 

There are no restrictions if the PPP Note is fully satisfied prior to closing the sale or transfer. However, if the PPP loan has not been fully satisfied then either the bank or the SBA must approve of the change of ownership. There could be cases that the bank can’t approve the change of ownership and SBA approval must be sought. SBA has up to 60 days to review a change of ownership. Please reach out to the bank as early as possible in the change of ownership process to ensure that you are able to close your sale or transfer in a timely manner.  

Here is an overview of the different Small Business Administration (SBA) Forgiveness Applications for the Paycheck Protection Program (PPP):

Complete the 3508S Form if you:

  • received a PPP loan of $50,000 or less, AND
  • together with your affiliates, didn’t receive PPP loans totaling $2,000,000 or more.

Complete the 3508EZ Form if you:

  • are a self-employed individual, independent contractor, or sole proprietor who had no employees at the time of the PPP loan application and didn’t include any employee salaries in the calculation of average monthly payroll on your application form; 

OR

  • you didn’t reduce annual salary or hourly wages of any employee by more than 25% during Covered Period/Alternative Payroll Covered Period compared to period between January 1, 2020 and March 31, 2020, AND 
  • didn’t reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period (taking into account the available safe harbor exemptions for: (a) reductions that arose from borrower’s inability to (i) rehire individuals who were employees on February 15, 2020 and (ii) hire similarly qualified employees for those unfilled positions on or before December 31, 2020, or (b) reductions in an employee’s hours that the borrower offered to restore and the employee refused). 

OR

  • you didn’t reduce annual salary or hourly wages of any employee by more than 25% during the Covered Period/Alternative Payroll Covered Period compared to the period between January 1, 2020 and March 31, 2020, AND 
  • you were unable to operate during the Covered Period at the same level of business activity as before February 15, 2020 due to compliance with maintenance of standards of sanitation, social distancing, or other COVID-19 work or customer safety requirements established or guidance issued by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration between March 1, 2020 and December 31, 2020. 

Complete the 3508 Form if you:

  • do not qualify to file either the SBA Form 3508EZ or 3508S.

Regardless of the Forgiveness Application you complete, remember that you must retain all records relating to the PPP loan, including documentation supporting your original application certifications and material compliance with PPP requirements, for six years after the date the loan is forgiven or repaid in full.

The following steps will ensure that your application is complete and processed promptly:

  • Send your files in securely.  Click here to upload files securely.
  • Understand that any Economic Injury Disaster Loan (EIDL) advance you received will be deducted from the amount of your PPP Loan that will be forgiven.
  • Double check that you have all of the necessary documentation included with your application.

Should you have additional questions regarding PPP loan forgiveness, please contact your local Coastal banker or reach out directly to the PPP Support Center at 425.349.9097 or [email protected].

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October 9, 2020

SBA Streamlines PPP Forgiveness for Loans of $50,000 and Under

The Small Business Administration last night released a much-anticipated, streamlined loan forgiveness application for Paycheck Protection Program loans totaling $50,000 or less. ‌

The two-page forgiveness application, Form 3508S, includes certifications from the borrower but does not require calculations to be submitted with the application. Applicants must submit documentation verifying forgivable payroll and non-payroll expenses. Borrowers are required to retain the documentation supporting their certifications for six years, but do not need to submit it.

Once the application is received, the lender must confirm that it received the borrower’s certifications and documentation. “Providing an accurate calculation of the loan forgiveness amount is the responsibility of the borrower,” SBA said in an interim final rule, reiterating previous guidance that “lenders may rely on borrower representations. . . . [T]he lender does not need to independently verify the borrower’s reported information if the borrower submits documentation supporting its request for loan forgiveness and attests that it accurately verified the payments for eligible costs.”

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September 30, 2020

An update regarding SBA PPP Forgiveness

It has been Coastal’s pleasure to help our clients through the PPP process. It’s been almost two months since the SBA began accepting forgiveness applications and we want to update you on how the process has gone, and what to expect timewise regarding the PPP forgiveness process. We’ve had a lot of questions about status and updates and want to alleviate some of the uncertainty.

Timeline

As a refresher, Coastal has 60 days to approve, reject, or reject in part, a completed loan forgiveness application. This timer does not start until a complete application is received. Once completed on Coastal’s end, the application is sent to the SBA who will then have 90 days to approve, reject, or reject in part, the forgiveness application.

In Practice

As of this writing, the SBA has indicated, and we predict, that the SBA will likely take the full duration in order to issue a response on these forgiveness applications. This means even the earliest of applications will not start receiving responses until November-December. There is also a very real possibility the SBA may take longer.

The entire PPP loan program was quickly put together, as was the forgiveness process. This was a herculean task from an organizational and administrative standpoint. As a result, the SBA is almost certainly understaffed and has not fully trained the staff they do have. Therefore, delays are very likely.

While we know many of our clients are eager to get the process completed; Coastal cannot move the SBA any faster; as much as we wish we could. These delays are not just for Coastal clients. As of this writing the SBA has not approved a single loan forgiveness application across the entire country as far as we can tell.

Patience

Since the PPP program is a bit of a beast, we do ask our clients to have a little patience with the program. We are certain there is no bank more knowledgeable and prepared to handle any issues regarding PPP forgiveness. We will work tirelessly to get your applications in and completed as soon as possible, while also doing as much quality review to ensure we get our clients as much forgiveness as possible with as low a risk of issues.

We know the process takes time, and we understand our customers are go-getters who really want to get this off their plate. However, rest assured that Coastal will notify each and every client when a decision is received from the SBA.

We thank you for your ongoing support of Coastal Community Bank and we will continue to keep you updated. Questions can always be sent to [email protected] or call 425.349.9097.

Current PPP information and an updated Forgiveness Checklist can be found on our website. 

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Below is a list of suggested documentation to maintain against the unlikely event of governmental enforcement action.  

  1. Document the reason why you needed a PPP Loan. This can include, but is not limited to:
    1. What were the financial projections at the time of the application?
    2. Was the business closed as a result of a state -order?
    3. Statement of Cash Flow, Balance Sheet, Income Statement supporting that the company financial position was deteriorating during the time of application.
    4. For public companies, any relevant disclosures to the SEC, especially those disclosures that indicate an inability to continue as a going concern. 
  • How many employees were on payroll at the time of the application?
    1. When submitting the application, were your employees at risk of being fired or their salary or hours reduced?
    2. Had you laid off staff, or were you preparing to do so?
  1. Did you have access to funds or other loans on reasonable terms during the time of application?

It is recommended that you retain these documents along with both your complete original PPP Application, as well as your Forgiveness Application.

According to the SBA, all records relating to the Borrower’s PPP loan, including:

  • documentation submitted with the PPP loan application
  • documentation supporting the borrower’s certifications as to the necessity of the loan request and its eligibility for a PPP loan
  • documentation necessary to support the borrower’s loan forgiveness application
  • documentation demonstrating the borrower’s material compliance with PPP requirements must be retained for six years after the date the loan is forgiven or repaid in full, and permit authorized representatives of SBA, including representatives of its Office of Inspector General, to access such files upon request. 

If you would like to be added to our email communication list, please email your name and company to [email protected]. We will email information regarding the new application process as soon as we learn it. 


Updates

March 3 - PPP Webinar Series

The U.S. Small Business Administration has some key changes to the Paycheck Protection Program (PPP) which will be available for a limited amount of time to ensure America’s smallest businesses get exclusive access. If you are a small business owner with fewer than 20 employees, or are self-employed; there is new information for you. Please join us for a series of webinars hosted by the U.S. Small Business Administration, Public Private Strategies Institute, & other stakeholders to hear about:

  • What steps you can take now to take advantage of this special opportunity, which closes at 5:00 P.M. EST, Tuesday, March 9, 2021
  • Additional changes and recent policy announcements made by the Biden-Harris Administration
  • Have your questions answered by SBA Leadership

Schedule

March 2 - Tax breaks for forgiven PPP loans

The IRS recently provided guidance on certain tax breaks for forgiven PPP loans that we want to make you aware of. This should not be construed as business advice and we encourage you to discuss this with your legal or accounting professionals.

The IRS had initially not allowed PPP borrowers to deduct certain expenses. However, in December 2020, Congress included tax breaks in the last COVID-relief legislation. It states that funds from forgivable PPP loans can be excluded from the borrower’s gross income (i.e., reduces taxable revenue), and business expenses allowed under the program (that were paid with forgiven PPP loans) can be deducted on the borrower’s tax return (i.e., reduces taxable income).

What’s deductible – and what’s not: 

Deductible expenses under the PPP program include :

  • payroll
  • mortgage interest
  • rent
  • utility expenses

Additional nonpayroll costs approved in the December 2020 legislation:        

  • covered mortgage obligations: payments of mortgage interest (not including any prepayment or payment of principal) on any business mortgage obligation on real or personal property incurred before February 15, 2020 (“business mortgage interest payments”)
  • covered rent obligations: business rent or lease payments pursuant to lease agreements for real or personal property in force before February 15, 2020 (“business rent or lease payments”)
  • covered utility payments: business payments for a service for the distribution of electricity, gas, water, telephone, transportation, or internet access for which service began before February 15, 2020 (“business utility payments”)
  • covered operations expenditures: payments for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting of tracking of supplies, inventory, records, and expenses
  • covered property damage costs: costs related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that were not covered by insurance or other compensation
  • covered supplier costs: expenditures made to a supplier of goods for the supply of goods that are essential to the operations of the Borrower at the time at which the expenditure is made, and made pursuant to a contract, order, or purchase order in effect prior to the beginning of the Covered Period (for perishable goods, the contract, order, or purchase order may have been in effect before or at any time during the Covered Period)
  • covered worker protection expenditures: operating or capital expenditures that facilitate the adaptation of the business activities of an entity to comply with the requirements established or guidance issued by the Department of Health and Human Services, the Centers for Disease Control, or the Occupational Safety and Health Administration, or any equivalent requirements established or guidance issued by a State or local government, during the period starting March 1, 2020 and ending on the date on which the national emergency declared by the President with respect to the Coronavirus Disease 2019 (COVID-19) expires related to maintenance standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19, but does not include residential real property or intangible property.

What’s not allowed to be paid using PPP funds and later deducted: business taxes.

Per the December legislation, borrowers with forgiven PPP loans can’t claim wages paid on their tax return, however they can now claim the Employee Retention Tax Credit on wages paid above and beyond the amount forgiven. To be eligible, borrowers must have paid their employees even if they had to shut down or had posted a 20% decline in gross receipts compared with the same quarter in the prior year. The credit is retroactive to March 12, 2020 and is good on qualified wages paid up to July 1, 2021.

We encourage you to talk with your tax professional if you have questions or need further clarification.

You can also find more information here:

The Paycheck Protection Program is open through March 31 and Coastal will continue to accept applications until that time. If you know of a business that can use our help, please ask them to call your Coastal banker.

February 22 - SBA Update

The Small Business Administration (SBA) announced several changes to the Paycheck Protection Program (PPP):

  • Beginning February 24 through March 9 the SBA will exclusively accept PPP applications from businesses with fewer than 20 employees.
  • Coastal will continue to accept loan applications from all eligible businesses and will hold complete packages for those with 20 or more employees for submission to the SBA starting on March 10.
  • A new application will be released later this week for IRS Schedule C Self-Employed Businesses, which we will make available as soon as it is released.

February 11 - Scam Alert:

Be cautious and aware of email scams. Due to the court-ordered disclosure of business owners who took PPP loans, some customers are seeing an increase in "vendors" contacting them to solicit loan support. If you ever have any questions, do not click on a link and contact a trusted advisors such as your banker, accountant, bookkeeper, or attorney for clarification.

January 8:
New Application forms were released on January 8 and can be found below under Resources. We are ready to begin accepting and processing them in preparation for the SBA to open the portal.


Resources - First Draw PPP Loans

SBA Form 2483 - First Draw Borrower Application
Use this application if this is your first PPP loan.

SBA Form 2483-C, Borrower Application Form for Schedule C Filers Using Gross Income 

PPP CIP & Beneficial Ownership Cert Form
This document is required for all new 2021 PPP loans, for both new and existing customers.

Top-Line Overview - First Draw PPP Loans

PPP First Draw Application Checklist - This is ONLY a checklist, NOT a loan application
This document is used if you are a first-time PPP borrower who did not get a PPP loan in 2020.

PPP First Draw Loan Calculation

How to calculate maximum loan amounts for first draw PPP loans and what documentation to provide.


Resources - Second Draw PPP Loans

SBA Form 2483-SD - Second Draw Borrower Application
Use this application if you received a PPP loan in 2020.

SBA Form 2484-SD-C,Second Draw Borrower Application Form for Schedule C Filers Using Gross Income 

PPP CIP & Beneficial Ownership Cert Form
This document is required for all new 2021 PPP loans, for both new and existing customers.

Top-Line Overview - Second Draw PPP Loans

PPP Second Draw Application Checklist - This is ONLY a checklist, NOT a loan application
This document is used if you if you did receive a PPP loan in 2020 and are applying again.

PPP Second Draw Loan Calculation

Second Draw Paycheck Protection Program (PPP) Loans: How to Calculate Revenue Reduction and Maximum Loan Amounts Including What Documentation to Provide


Other Resources

PPP FAQs

PPP Resources for Nonprofits

Guidance on Accessing Capital for Minority, Underserved, Veteran and Women-Owned Business Concerns

The SBA has posted two new interim final rules. You can find them here:

PPP-IFR-Paycheck-Protection-Program-as-Amended-by-Economic-Aid-Act.pdf (treasury.gov)

PPP-IFR-Second-Draw-Loans.pdf (treasury.gov)

 

The 7(a) loan program is the SBA's primary program for providing financial assistance to small businesses. The terms and conditions, like the guaranty percentage and loan amount, may vary by the type of loan.

To learn more visit https://www.sba.gov/partners/lenders/7a-loan-program/types-7a-loans.

SBA Preferred Lending Partner

As an SBA Preferred Lending Partner, our decisions are made locally, which means faster answers for you. Our experienced staff will help you determine if an SBA Loan is right for you.

  • Ideal for purchasing and refinancing existing businesses
  • Government-assisted help for businesses that might otherwise have difficulty getting approved
  • Special financing for qualifying businesses
  • Competitive rates for a wide range of business needs:
    • Commercial real estate purchase
    • Construction
    • Business acquisition or expansion
    • Equipment/inventory purchase
    • Working capital
    • And more
  • Lending options available for start-up businesses
  • Quick, local decision-making and processing
  • Attentive, friendly service from start to finish
Coastal Community Bank's agreement and commitment to lend money is contingent on the Bank's final underwriting approval and proper documentation and subject to credit approval.