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paycheck protection program

Loan Forgiveness

Keep up to date with the changes to the PPP Loan Forgiveness guidelines

We understand loan forgiveness for your Paycheck Protection Program (PPP) loan is a critical topic for your business during this time.

If you received your PPP loan through Bank of Hawaii, you’ll need to submit your request through us as well. Now is the time to take the first step — preparing for loan forgiveness.

Loan Forgiveness Update

You will be able to apply for loan forgiveness if your PPP funds were used for eligible costs under this federal program. Loan forgiveness will not be automatic; you will need to apply for loan forgiveness and provide supporting documentation. We will inform our PPP borrowers by email once our online loan forgiveness application is available.

Stay informed by continuing to check our website. Information is being updated as new program details are released. It is important for borrowers to stay abreast of the changes to the Paycheck Protection Program as the SBA continues to issue new and revised rules and guidance. We are incorporating PPP changes into our future online loan forgiveness application platform. Through this new platform, the information you will need to provide will be dynamically customized based on your situation.

As of October 8, 2020, the SBA now has three versions of the loan forgiveness application form. The newest version, 3508S, is for borrowers with PPP loans of $50,000 or less and will simplify the application form for those who qualify. Reviewing the applicable SBA form is important for you to understand the type of information you’ll need to input into our online application. Learn more about the different versions of the form in Step 2 below.

Getting ready for loan forgiveness

Step 1 - Gather your documents

Gather documentation and save electronic copies for eligible costs. Learn more on the types of documents you may need.

  • Payroll costs using the same definition of payroll costs used to determine loan eligibility – Be sure that at least 60% of the loan amount was used for payroll costs.
  • Interest on existing mortgage obligations incurred in the ordinary course of business
  • Rent under an existing lease agreement
  • Payments on utilities including electricity, gas, water, transportation, telephone, or internet

Step 2 - Review the application & requirements

Review the SBA loan forgiveness applications to understand the SBA requirements and definitions of key terms regarding loan forgiveness.

Step 3 - Review the guidelines

Review the latest Small Business Administration guidelines at sba.gov/ppp to ensure you’re up-to-date on requirements for loan forgiveness as these terms are set through the federal program.

Applying for loan forgiveness

Loan forgiveness is the second major phase of your PPP loan. Similar to when you applied for the PPP loan, our loan forgiveness process will be online, including an electronic signing.

Here’s what you can expect during this phase:

  • Bank of Hawaii notifies the borrower that the loan forgiveness application portal is available
  • Borrower applies online & uploads documents
  • Bank of Hawaii reviews the application & documents and submits them to the SBA
  • Borrower signs documents electronically
  • Bank of Hawaii receives the loan forgiveness decision from SBA and communicates the decision to the Borrower

When the online loan forgiveness application platform is available, we will email our PPP borrowers. Please do not fill out the SBA loan forgiveness form and submit it to Bank of Hawaii. We will only be accepting applications online for loan forgiveness.

Important changes affecting loan forgiveness

There has been a number of changes and clarifications issued by the SBA for the Paycheck Protection Program. Below are notable updates that may impact your loan forgiveness.

  • Covered period
    • Loan forgiveness covered period: Borrowers may choose to extend the eight-week forgiveness covered period to 24 weeks from your loan origination date, or December 31, 2020, whichever is earlier.
    • Payroll period flexibility: The SBA has offered some options for borrowers to calculate payroll costs using an "alternative payroll covered period" that aligns with borrowers’ regular payroll cycles.

  • Payroll costs and employee levels
    • Spending requirements: The minimum amount that needs to be used for payroll costs has decreased from 75% to 60%.
    • Salary/hourly wage reductions: The SBA guidance includes how to calculate whether the forgiveness amount is reduced based on reductions in employee salary and wages by more than 25% for employees who earned $100,000 or less in 2019.
    • FTE reductions: The SBA issued guidance for a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined.
    • Deadline to rehire employees: The previous deadline of June 30, 2020 to rehire employees has been extended to December 31, 2020. In addition, exceptions based on employee availability were added.

Have questions?

Please visit our FAQ page with answers to common questions regarding the Paycheck Protection Program, including information on loan forgiveness.

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