PPP Update Peoples State Bank - February 11, 2021

PPP Update
Peoples State Bank
  February 11, 2021

                      1

Welcome and
President’s
Message
Scott Cattanach

Today’s Agenda

• New PPP loan opportunities
• 2nd PPP loan process and CLA
  partnership
• Major changes to PPP program
• SBA review of new loans
• Forgiveness update
• Available resources
• Q&A
                                 3

What Is Currently ‘Active’ With PPP?

All borrowers that received a First Draw PPP loan in 2020
can and should submit their application for forgiveness

First Draw PPP loans for any borrower that has not yet
received a PPP loan

Increases to eligible first draw PPP loans based on new
parameters identified

Second Draw PPP loans for borrowers that secured a PPP
loan in 2020 and have used all the loan funds

                                                            4

PSB’s Relationship With
CliftonLarsonAllen (CLA)
• Partnering with CLA to facilitate
  forgiveness applications

• Managing all applications for the
  second draw process

• PSB’s core competencies and
  dedication to serving its
  customers
                                      5

The Process
and Changes
Meredith Otte

Major Changes to Program With
            Second Draw
•   Only entities that have fewer than 300 employees (reduced from 500 the first
    time around)
•   Must use all your first round PPP funds prior to receiving disbursement on a 2nd
    draw
•   All round one funds were used for eligible expenses
•   Demonstrated revenue reduction of greater than 25%, year over year, from
    2019 to 2020 (must supply documentation)
      o Can be substantiated with comparing annual gross revenues from filed tax
         returns
      o Can be substantiated by comparing a like quarter year over year (please
         note that you meet the requirement if any SINGLE quarter from 2019 to
         2020 shows the 25% reduction in revenues)
•   For loan amount determination, borrowers with NAICS codes beginning with
    72(largely hotels and restaurants) can use a 3.5 multiplier for round two. All
    other borrowers continue to use a 2.5 multiplier.
•   Maximum loan amount is $2,000,000 for any one borrower and $4,000,000
    aggregate for a business enterprise (related entities)

                                                                                   7

The SBA’s Involvement

• The updated rules and guidance call for a lot more up-front verification
  and documentation
    •   More requests for information from banks and their partners (CLA) with the
        application process

• The SBA is reviewing EVERY application prior to providing authorization
    •   Results in a slower turnaround than what we saw the first time

• A lot of errors occurring on the SBA side, slowing down the process and
  calling for more information
    •   During the application review, all entities are scrubbed against multiple government
        and federal databases to ensure no mismatches in information. Spelling errors,
        transpositions and misinformation (right data wrong field) is kicking applications
        back
    •   If application changes are made, a new application MUST be signed, causing
        multiple requests for DocuSign

                                                                                           8

CLA will review all new applications and
               respond to borrower with any requests
               for more information

               Once a complete application is in place,
               CLA will review for accuracy, vetting out
 Processing    common SBA errors
    NEW
Applications   CLA sends to PSB and PSB submits to SBA
               with authorization usually received
               within 72 hours

               Once authorization is in place, PSB has
               ten calendar days to close and fund
               Second Draw PPP loan

                                                     9

When Do I Need to Apply for
              Forgiveness?
• Borrowers can apply for forgiveness of their PPP loan after the 8 or 24
  week covered period or when they deplete their funds, whichever
  comes sooner

• Borrowers have up until the loan maturity date to apply for forgiveness

• Loan is in deferral (no interest or principal payments due) for 10
  months from the end of the covered period
    •   If borrower’s forgiveness application is SUBMITTED TO THE SBA by the end of that
        period, no payments will be due while SBA is making final decision (during their 90
        day window)
    •   Ex. First Draw PPP loan funded April 20, 2020, borrower electing an eight-week
        covered period. End of covered period is June 15, 2020 with end of deferral period
        being April 15, 2021. Borrower’s application for forgiveness would need to be
        submitted to SBA by April 15, 2021.

                                                                                         10

From submission of a complete
               application, the Bank has up to 60 days
               to submit to SBA

Timeline for   Once SBA receives bank submission, it
 processing    has up to 90 days to review for final
Forgiveness    decision
Applications
               Once final decision is made and Bank is
               paid, customer receives notification in
               48 hours with a letter for records
               requiring signature within a week

                                                 11

Resources Available for
         You
• Your Commercial Banker

• PPPinfo@bankpeoples.com

• Second Draw Questions or
  issues with CLA:
  • Communicate directly through
    the portal
  • pppapp@claems.com
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Closing and Questions