The Paycheck Protection Program (PPP) authorized up to $660 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. PPP was designed to provide economic support by offering loans to enable companies to retain employees and pay certain operational expenses incurred during the COVID-19 pandemic.

We appreciate all of the small businesses that chose BancorpSouth to provide their Paycheck Protection Program (PPP) loan. We are proud to have processed and funded over 14,200 PPP loans totaling over $1.2 billion. These funds were provided over a broad range of industries across our eight-state footprint, most of which are small businesses. Providing the payroll and working capital necessary to support these businesses within our communities has helped retain over 170,000 jobs.

For many of the businesses that obtained a PPP loan, the next phase of the process is quickly approaching — that of the calculation and submission for forgiveness. As in the origination phase, BancorpSouth will be actively engaged and will work diligently to be a resource of information on the forgiveness process and will facilitate the submission of your information to the Small Business Administration (SBA) for forgiveness consideration.

On May 16, 2020, the SBA and Treasury Department issued guidance along with the proposed application form and instructions necessary to complete the forgiveness process. Subsequently, the House and Senate passed the Paycheck Protection Program Flexibility Act, easing significant parts of the forgiveness requirements, and President Trump signed the bill into law on June 5, 2020.The SBA published revised applications on June 16, 2020 providing two different application forms for requesting forgiveness.  Under certain circumstances, borrowers who qualify may submit the PPP Loan Forgiveness Application Form EZ (the EZ Form), which allows for a significantly abbreviated process for determining forgiveness.  The EZ form and Instructions for completing the EZ form can be found here.  The original forgiveness application was also modified, and this application requires more detailed information and support for calculating forgiveness.  It must be used by those borrowers who do not qualify to use the EZ form.  The PPP Loan Forgiveness Application and instructions can be found here.

These applications incorporated the following important changes:

  • Extended the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement, providing substantially greater flexibility for borrowers to qualify for loan forgiveness. Borrowers who have already received PPP loans retain the option to use an eight-week covered period.

  • Lowered the requirements that 75 percent of a borrower’s loan proceeds must be used for payroll costs and that 75 percent of the loan forgiveness amount must have been spent on payroll costs during the 24-week loan forgiveness covered period to 60 percent for each of these requirements. If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.

  • Provided a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity at which the business was operating before February 15, 2020, due to compliance with requirements or guidance issued between March 1, 2020 and December 31, 2020 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, related to worker or customer safety requirements related to COVID–19.

  • Provided a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020.

  • Increased to five years the maturity of PPP loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020.

  • Extended the deferral period for borrower payments of principal, interest and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period).

The Bank will continue to provide a summary of updated guidance and forms as they are provided by the SBA.

Last Update: July 8, 2020