NEW PPP Information from First Northern Bank
January 12, 2021
The SBA has posted its Interim Final Rules for PPP as Amended by the Economic Aid Act.
Please note there are two versions:
Version 1: [Paycheck Protection Program (PPP) as Amended by the Economic Aid Act (01/06/2021)]
Version 2: [Paycheck Protection Program (PPP) Second Draw Loans (01/06/2021)].
The SBA has announced that on January 11, it will only begin accepting what its calling “first-draw” loans from small businesses that have yet to receive a PPP loan, and it will only be accepting those applications from “community financial institutions”. These lenders are defined as Community Development Financial Institutions, minority deposit institutions, certified development companies and microloan intermediaries, which means those lenders will be able to process applications and submit them to the SBA first.
On January 13, small businesses applying for a second PPP loan will be able to do so, but once again only with “community financial institutions”.
The PPP will then open up to all participating lenders “shortly thereafter”. This is the lender group that First Northern Bank is a part of.
Hot off the press…just moments ago, the SBA announced that the Forgiveness Platform for Round 1 has been updated and, effective immediately, the SBA will no longer deduct Economic Injury Disaster Loan (EIDL) Advances from forgiveness payments remitted to PPP lenders.
This change will be applied to SBA forgiveness payment with a status of “Payment Confirmed” dated December 29, 2020 or later. For those loans where SBA remitted a forgiveness payment to a PPP lender that was reduced by an EIDL Advance, SBA will automatically remit a reconciliation payment to the PPP lender for the previously-deducted EIDL Advance amount, plus interest through the remittance date.
The PPP lender is responsible for notifying the borrow of the reconciliation payment. The PPP lender is also responsible for re-amortizing the loan and notifying the borrower of the amount of the next payment due, or advising the borrower that the loan has been paid in full, whichever is applicable.
If the amount remitted by SBA to the PPP lender exceeds the remaining principal balance of the PPP loan (because the borrower made a payment on the loan), the PPP lender must remit the excess amount, including accrued interest paid by the borrower, to the borrower.
First Northern Bank is looking forward to once again playing a major role in its communities by helping local businesses that have been financially impacted by the ongoing coronavirus pandemic get access to the assistance made available under the Economic Aid Act, signed into law on December 27, 2020.
We are also pleased to share that we will be rolling out a very intuitive online PPP Loan application system this time around. The system will allow our customers to check on the status of their loan from the application phase and loan processing phase to the funding phase. Plus, if you participated in PPP Round 1 with us, your Round 2 online application will be pre-populated with all the pertinent information we already have on file.
You can rest assured that we will let you know as soon as our PPP application system is ready to accept applications.
Please visit our WEBSITE for more information.