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Small Business Relief

Paycheck Protection Program

Hawaii National Bank is committed to ensuring that Hawaii business owners receive the support and latest updates you need during the COVID-19 pandemic.

Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to assist small businesses that have been impacted by the COVID-19 pandemic. The Paycheck Protection Program (PPP) was created to help small businesses cover certain business expenses like employee payroll costs, rent, mortgage interest, and utilities.

Updates

October 28, 2020: Please review the Forgiveness Application Guide first to determine which forgiveness application form is best for you. Form 3508EZ and Form 3508 filers can apply now using our online Forgiveness Portal. Form 3508S will available beginning November 14, 2020.

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October 9, 2020: The SBA just released a streamlined application, Form 3508S, for borrowers with loans less than or equal to $50,000 (excluding borrowers with affiliates who received PPP loans totaling $2 million or more). We are working diligently to update our Forgiveness Portal to accommodate Form 3508S and will notify you as soon as the new application is available in the Portal. Please refer to the Form 3508S Instructions for additional details about this streamlined application.

October 1, 2020: All PPP borrowers should have received an email with a Forgiveness Request Link. If you have not received an email yet, please contact your Relationship Officer directly. Please see the Loan Forgiveness section below for more information.

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August 20, 2020: We will begin onboarding PPP borrowers to the Hawaii National Bank Forgiveness Portal in late August. Please note that each borrower must apply for loan forgiveness – forgiveness is not automatic. Please see the Loan Forgiveness section below for more detailed information.

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June 11, 2020: The SBA and US Department of Treasury released an interim final rule to reflect changes made by the recently passed Paycheck Protection Program Flexibility Act (H.R. 7010). The SBA also published updated, streamlined loan forgiveness application forms for borrowers and lenders to use for loans made on or after June 5, 2020.

The interim final rule codifies several changes to the program. Specifically, it:

  • Confirms that borrowers that use less than 60% of their PPP loan amount for payroll costs during the forgiveness covered period will still be eligible for partial loan forgiveness.

  • Extends the end date of the covered period for a PPP loan from June 30, 2020 to Dec. 31, 2020.

  • Provides a five-year maturity for loans made on or after June 5, 2020, and provides an option for loans made prior to that date to extend maturity from two years to five years at the mutual agreement of the borrower and lender.

  • Extends the loan forgiveness period from eight weeks to 24 weeks. (For loans made prior to June 5, 2020, borrowers may opt to keep the forgiveness period at eight weeks.)

  • Clarifies that if a borrower submits its forgiveness application within 10 months of the end of the loan forgiveness period, the borrower will not have to make any payments on the loan before the date SBA remits the forgiven amount to the lender.

  • Reiterates that the last day a lender can obtain an SBA loan number for a PPP loan is June 30, 2020.

The SBA is expected to issue additional revisions to its interim final rules to address changes made to loan forgiveness requirements by the PPP Flexibility Act. We are continuing to monitor information as released and will provide an update as soon as possible.

Source: ABA and SBA

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May 15, 2020: The SBA and US Department of Treasury released the Paycheck Protection Program Loan Forgiveness Application today. We are carefully reviewing the application and instructions and will provide an update on the loan forgiveness process as soon as possible.

Source: SBA

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May 13, 2020: Due to the high volume of PPP applications received, we are no longer accepting new applications at this time. We are working diligently to process the applications already received. Mahalo for your understanding.

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May 6, 2020: Effective May 5, 2020, the SBA is extending the repayment date for the safe harbor from May 7 to May 14, 2020. For more, see the updated FAQ here.

Source: SBA

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April 28, 2020: Effective April 28, 2020, the SBA issued new guidance for the PPP program that included a Limited Safe Harbor clause with respect to certification concerning the need for a PPP loan request. In conjunction with this new guidance, if you no longer need your PPP loan to support your ongoing operations, or if you misunderstood the requirements for forgiveness, you may return funds without penalty under safe harbor terms by May 7, 2020. Additional information on the Interim Final Rule outlining safe harbor regulations can be found here.

Source: SBA

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April 27, 2020: Congress recently approved a second round of funding for the Paycheck Protection Program. We will be prioritizing previously submitted loan applications, but are also accepting new applications from those unable to submit during the first round of PPP assistance. Applications will be processed in the order received while PPP funding is available. We may not be able to process all applications received before the funds are depleted. Applications will be accepted beginning Monday, April 27, 2020.

If you have any questions, please contact your Relationship Officer or email PPPLoans@HNBhawaii.com.

All loan terms are the same regardless of the lender, and funds are limited, so it’s best to submit your application as soon as possible.

Loan Forgiveness

There are four steps for PPP Loan Forgiveness:

1. Online Portal Registration

- You should have received an email for access to your Forgiveness Portal. The email was sent from SBA.PPP.Forgiveness@hnbhawaii.com.

- If you did not receive the email, please contact your Relationship Officer directly.

2. Complete Forgiveness Application

- You will need to complete the application and upload documents in accordance with SBA guidelines.

- Please refer to the Forgiveness Application Guide to help you determine which forgiveness application to complete - Form 3508, Form 3508EZ, or Form 3508S.

- Please refer to the Forgiveness Portal Guide for helpful instructions to complete the application in the Forgiveness Portal.

3. Hawaii National Bank Reviews Forgiveness Application

- HNB has up to 60 days to review a signed application and submit to the SBA.

4. SBA Forgiveness Decision

- The SBA has 90 days to review and issue the forgiveness decision.

- Borrowers can appeal the SBA's forgiveness decision directly with the SBA. However, SBA interim final rules around appeals have not yet been released.

Helpful Guides

    Forgiveness Portal Guide: Step-by-step instructions for completing your forgiveness application in the Forgiveness Portal.

    Download Guide

    Forgiveness Application Guide: Guide to help you determine which forgiveness application is right for you: Form 3508, Form 3508EZ, or Form 3508S.

    Download Guide

Loan Forgiveness - Where to Begin

To prepare for the forgiveness application, first determine which forgiveness form you should complete. There are three forgiveness forms - Form 3508, Form 3508EZ, and Form 3508S - that are available in the Forgiveness Portal. Please refer to the Application Guide, SBA’s Checklist for Using SBA Form 3508EZ, or SBA Form 3508S instructions to help you determine which application is right.

You can also begin preparing support documents for your forgiveness application. Please keep in mind that support documents vary depending on your application type and use of funds. In addition to submitting support documents, SBA guidelines also require borrowers to maintain certain types of information that may be requested by the SBA. Refer to SBA instructions for the most up-to-date guidance:

Form 3508 – Refer to page 10

Form 3508EZ – Refer to page 4

Form 3508S – Refer to page 3

Loan Forgiveness Guidelines

Loan forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

Your PPP loan can be partially or fully forgiven if proceeds are used within the Covered Period for:

·         Payroll costs (at least 60% of loan proceeds)

·         Mortgage interest, rent and utilities (no more than 40% of loan proceeds)

Any funds not used within the Covered Period will not be eligible for loan forgiveness.

Any portion of the funds that are not forgiven will need to be repaid. There is no prepayment penalty or fees for paying off the loan earlier.

You can apply for forgiveness as soon as proceeds have been spent. There is no need to wait for the Covered Period to end before applying for forgiveness (as long as proceeds were fully used). Payments will begin when your deferral period ends or after your forgiveness application is reviewed by the SBA. Loans awaiting SBA forgiveness decisions are considered deferred.

Please Note: The SBA continues to make revisions to the Paycheck Protection Program, including details regarding loan forgiveness, and information is subject to change. Please refer to the SBA’s website for the most up-to-date information.

  • Loan terms are the same for all borrowers:

    • No collateral or personal guarantee required

    • No fees and a 1.0% interest rate

    • Loans can be fully forgiven

    • Payments are deferred during the Covered Period and the following 10 months. Payments begin after the deferral period ends or after the SBA reviews your forgiveness application.

  • You can use PPP Loans for:

    Your Employees (at least 60% of the loan funds can go to these items):

    • Payroll costs (all costs mentioned in “How much can I borrow?”)

    • Costs related to group health care benefits during periods of paid sick, medical or family leave, and insurance premiums

    • Employee salaries, commissions, or similar compensations (except as excluded in “How much can I borrow”)

    Your Business (up to 40% of the loan funds can go to these items):

    • Payments of interest on any mortgage (but not payment or prepayment of principal)

    • Rent and Utilities

    • Interest on any other debt obligations that were incurred before February 15, 2020.

Questions

  • Loan terms are the same for all borrowers:

    • No collateral or personal guarantee required

    • No fees and a 1.0% interest rate

    • Loans can be fully forgiven

    • Payments are deferred during the Covered Period and the following 10 months. Payments begin after the deferral period ends or after the SBA reviews your forgiveness application.

  • You can use PPP Loans for:

    Your Employees (at least 60% of the loan funds can go to these items):

    • Payroll costs (all costs mentioned in “How much can I borrow?”)

    • Costs related to group health care benefits during periods of paid sick, medical or family leave, and insurance premiums

    • Employee salaries, commissions, or similar compensations (except as excluded in “How much can I borrow”)

    Your Business (up to 40% of the loan funds can go to these items):

    • Payments of interest on any mortgage (but not payment or prepayment of principal)

    • Rent and Utilities

    • Interest on any other debt obligations that were incurred before February 15, 2020.

NOTE: The SBA continues to make revisions to the Paycheck Protection Program, and information is subject to change. As such, additional documentation and information may be required.

Additional Resources