Paycheck Protection Program

Woodforest continues to work alongside small businesses in our local communities to navigate the complexities of procuring needed funds under the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) as well as the associated PPP forgiveness process. As of now, we are no longer accepting PPP loan applications. If you are still waiting for loan approval, please ensure you have provided all necessary loan documentation.


For those with approved PPP loans, we are ramping up to assist you with the PPP loan forgiveness process. You now have more time and flexibility to spend the funds and to qualify for forgiveness. The SBA has published two PPP Loan Forgiveness Applications: the new 3508 EZ Form and the standard 3508 Form.


You may be eligible to use the 3508 EZ Form and we encourage you to review the checklist on page 1 of the Loan Forgiveness Application Form EZ Instructions to determine if you are eligible to use this Form. Both applications and instructions can be found on treasury.gov or on the SBA.gov site.


Woodforest will send an email explaining the forgiveness application process and a link to apply. All forgiveness applications must be submitted electronically. No paper or emailed applications will be accepted. Please monitor your email and check your junk or spam folder if you cannot find system-generated emails from @woodforest.com, @docusign.net, or @expressbankloan.com.


Review the forgiveness information below carefully and check this website regularly for more details. It is imperative you understand the rules and prepare documentation on how you spent the funds.


For all our customers, please know your Woodforest family is still here and ready to help, dedicated to serving your small business during this unprecedented time. Call us (toll-free) at (800) 685-6783 for questions or additional assistance.

To ensure your business can maximize the amount of your PPP loan that may be forgiven, and to assist with the timely processing of forgiveness requests, we are providing the following information gathered from the recent SBA guidance on PPP loan forgiveness.


We recommend you visit treasury.gov for the most up-to-date guidance and rules regarding the PPP from the SBA and the Treasury Department.


Please note that other eligibility requirements may apply, and it is important you consult with your professional advisors if you have any questions about the SBA guidance or rules.

Question sign imageHow much of my loan will be forgiven?
 
  • The amount of loan forgiveness can be up to the full principal amount of the loan plus any accrued interest.
  • The actual amount of loan forgiveness will depend on how the loan funds were used.
Question sign imageWhat if all, or part, of my loan is not forgiven?
 

You will be responsible for repayment of any principal and interest amounts not forgiven in accordance with the terms of the Promissory Note you signed.

Question sign imageWhat can I do to make sure that I am eligible for forgiveness of the maximum amount of my PPP loan?
 

For any part of the loan to be eligible for forgiveness, it is critical that you use the PPP funds according to the SBA rules. If all SBA rules and steps are properly followed and the funds are used under those rules, it is anticipated the SBA will forgive the entire balance. Failure to follow the guidance will likely result in a reduction of the amount of the loan forgiven. Some important things to remember and keep track of during the covered period1:

  • For forgiveness purposes, PPP funds may only be used for:
    • Payroll costs2
    • Mortgage interest, rent or utility payments (all under agreements in place before February 15, 2020)3
  • At least 60% of the loan must be used for payroll costs.
  • All funds must be spent during the covered period after you receive the funds.
  • You must maintain the same number of full-time equivalent (FTE) employees.4
  • You cannot reduce salaries or wages by more than 25% for any employee making under $100,000.
  • If you have already reduced employee or salary levels, you can restore both to their previous levels by no later than December 31, 2020 and still be eligible for forgiveness of the full amount of the loan.5
  • You must keep accurate records and save all documentation verifying your use of the PPP loan funds – you will need to provide documented proof of how you spent the funds and certify those records are true and accurate.
Question sign imageWill I owe any money on my PPP loan?
 

You will very likely owe money on the loan if:

  • You use the funds for anything other than payroll costs, mortgage interest, rent, and utilities payments, as described above.
  • You do not use at least 60% of the funds for payroll costs; no more than 40% spent on non-payroll costs will be forgiven.
  • You do not use the entire amount, for authorized uses, during the covered period after you receive the funds.
  • You do not maintain your staff levels; or if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 in 2019, and do not restore those levels before December 31, 2020.
Question sign imageHow do I apply for forgiveness of my PPP loan and when should I apply?
 

Woodforest will send you an email invite with additional information, and a link, on how to submit your request for forgiveness and supporting documentation. Please monitor your email and check our website regularly for more details.

Important Notes:

  • Forgiveness of the PPP loan is not automatic and a request for loan forgiveness must be submitted to Woodforest.
  • The SBA has issued two applications (standard 3508 and 3508 EZ Forms) for borrowers to apply for loan forgiveness. You can determine if you are eligible to complete the 3508 EZ Form by reviewing the checklist on page 1 of the Loan Forgiveness Application Form EZ Instructions.
  • Woodforest will determine if your application and documentation is complete (within 60 days) and will forward to the SBA for final determination.
  • The SBA makes the final approval decision on all PPP loan forgiveness applications.
Question sign imageWhat kind of documentation do I need to provide?
 

You must provide documents that verify your use of PPP funds during the covered period after receiving the loan funds.

  • If eligible for the Forgiveness Application Form EZ, refer to page 4 of the Form EZ Instructions for a list of required and optional documentation verifying payroll costs, full time equivalent (FTE) numbers, and non-payroll expenses.
  • If required to use the standard Loan Forgiveness Application, please refer to pages 6-7 of the Application Instructions for a list of required and optional documentation verifying payroll costs, full time equivalent (FTE) numbers, and non-payroll expenses.

1) For most Borrowers, the Covered Period is either (1) the 24-week (168-day) period beginning on the PPP loan disbursement date, or (2) if the borrower received its PPP loan before June 5, 2020, the borrower may elect to use an eight-week (56-day) Covered Period. In no event may the Covered Period extend beyond December 31, 2020. For Borrowers with bi-weekly or more frequent payroll schedules, they can choose to use an alternate Covered Period. If that election is made, the Covered Period is the 24-week (168-day) period (or for loans received before June 5, 2020 at the election of the borrower, the eight-week (56-day) period) that begins on the first day of their first pay period following their PPP loan disbursement date.

2) Payroll costs are defined in the SBA rules to include: salary (not more than $100,000 on an annualized basis for any employee), wages, commissions, cash tips; vacation, parental, family, medical or sick leave; allowance for separation or dismissal; employee benefits such as payment for group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees. Payroll costs incurred but not paid during the Borrower’s last pay period of the Covered Period (or Alternative Payroll Covered Period) are eligible for forgiveness if paid on or before the next regular payroll date. Otherwise, payroll costs must be paid during the Covered Period (or Alternative Payroll Covered Period) SBA First Interim Final Rule. For self-employed individuals who file a 2019 Form 1040 Schedule C, the funds may also be used for owner compensation replacement. Note the forgiveness amount for owner compensation replacement is limited to 8 weeks of net profit. Please see the additional rules for self-employed individuals. SBA Third Interim Final Rule.

3) For self-employed individuals who file a 2019 Form 1040 Schedule C, covered mortgage interest, rent and utility payments also must be deductible as business payments to be forgiven.

4) The same number of full-time equivalent (FTE) employees must be maintained during the covered period after you receive the funds when compared to the average number of FTEs you had in February 15, 2019 - June 30, 2019 or January 1, 2020 - February 29, 2020. It is your choice which period is used for this comparison.

5) Under the rules, the amount of eligible forgiveness amount will not be reduced if: (a) you, in good faith, are able to document that you were unable to operate between February 15, 2020, and the end of the Covered Period at the same level of business activity as before February 15, 2020, due to compliance with requirements established 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 (includes both direct and indirect compliance with COVID requirements and guidance, such as state and local government shutdown orders that are based in part on guidance from the three federal agencies [based on the Interim Final Rule posted June 22, 2020]), related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19; or (b) if both of the following conditions are met: (1) the borrower reduced its FTE employee level in the period beginning February 15, 2020, and ending April 26, 2020; and (2) the borrower then restored its FTE employee levels as of the earlier of December 31, 2020 or the date of the application to its FTE employee levels in the borrower’s pay period that included February 15, 2020. Also, any FTE reductions in the following situations will not reduce your loan forgiveness amount: The FTE of: (a) any positions for which the borrower made a good-faith, written offer to rehire an individual who was an employee on February 15, 2020 and the borrower was unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020; (b) any positions for which the borrower made a good-faith, written offer to restore any reduction in hours, at the same salary or wages, during the Covered Period or the Alternative Covered Period and the employee rejected the offer; and (c) any employees who during the Covered Period or the Alternative Payroll Covered Period (i) were fired for cause, (ii) voluntarily resigned, or (iii) voluntarily requested and received a reduction of their hours.

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