Small Business Lending Information



May 12, 2020 Covid-19 Update

Intracoastal Bank Clients:

We are pleased to announce that we have approved and funded nearly 300 Paycheck Protection Program (PPP) loans to date and continue to accept applications through our website. We encourage you to apply as soon as possible if you have not already. Since appropriated funds are shrinking fast there is no guarantee you will be funded if you apply today.

If you received a PPP loan, it is time to turn your attention to forgiveness. All PPP Borrowers can apply for forgiveness through Intracoastal Bank starting 8 weeks after your loan was funded. There is still a lot of uncertainty around this process and we are awaiting further guidance from the SBA. So you can begin preparing, we’ve included the SBA guidance as of 5/6/2020 in its original language on page two of this letter. We have also included a link to SBA’s Borrower Information Sheet that we suggested all applicants read prior to applying. This information sheet also includes additional information on forgiveness. We will continue to keep you updated as we receive new guidance from the SBA. You can also find all SBA guidance at the following link . Please call your Relationship Manager if you have any questions. It is important to note, that everything we know about forgiveness is included on page two of this letter.

Sincerely,

Bruce Page

President/ Chief Executive Officer

Intracoastal Bank

1290 Palm Coast Pkwy NW, Palm Coast, FL 32137

2140 LPGA Blvd Daytona Beach, FL 32117

FLAGLER: 386 447-1662 VOLUSIA: 386 274-5304

24 Hour Telebanc: 866 896-5353

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SBA Guidance on PPP Forgiveness:

The Information Below can be found at:

From Interim Final Rule 1 Dated 4/2/20: Can my PPP loan be forgiven in whole or in part? Yes. The amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest. That is, the borrower will not be responsible for any loan payment if the borrower uses all of the loan proceeds for forgivable purposes described below and employee and compensation levels are maintained. The actual amount of loan forgiveness will depend, in part, on the total amount of payroll costs, payments of interest on mortgage obligations incurred before February 15, 2020, rent payments on leases dated before February 15, 2020, and utility payments under service agreements dated before February 15, 2020, over the eight-week period following the date of the loan. However, not more than 25 percent of the loan forgiveness amount may be attributable to non-payroll costs. While the Act provides that borrowers are eligible for forgiveness in an amount equal to the sum of payroll costs and any payments of mortgage interest, rent, and utilities, the Administrator has determined that the non-payroll portion of the forgivable loan amount should be limited to effectuate the core purpose of the statute and ensure finite program resources are devoted primarily to payroll. The Administrator has determined in consultation with the Secretary that 75 percent is an appropriate percentage in light of the Act’s overarching focus on keeping workers paid and employed. Further, the Administrator and the Secretary believe that applying this threshold to loan forgiveness is consistent with the structure of the Act, which provides a loan amount 75 percent of which is equivalent to eight weeks of payroll (8 weeks/2.5 months = 56 days/76 days = 74 percent rounded up to 75 percent). Limiting non-payroll costs to 25 percent of the forgiveness amount will align these elements of the program, and will also help to ensure that the finite appropriations available for PPP loan forgiveness are directed toward payroll protection. SBA will issue additional guidance on loan forgiveness.

From Frequently Asked Questions as of 5/5/20: Will a borrower’s PPP loan forgiveness amount (pursuant to section 1106 of the CARES Act and SBA’s implementing rules and guidance) be reduced if the borrower laid off an employee, offered to rehire the same employee, but the employee declined the offer? No. As an exercise of the Administrator’s and the Secretary’s authority under Section 1106(d)(6) of the CARES Act to prescribe regulations granting de Minimis exemptions from the Act’s limits on loan forgiveness, SBA and Treasury intend to issue an interim final rule excluding laid-off employees whom the borrower offered to rehire (for the same salary/wages and same number of hours) from the CARES Act’s loan forgiveness reduction calculation. The interim final rule will specify that, to qualify for this exception, the borrower must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower. Employees and employers should be aware that employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.

SBA’s Borrower Information Sheet:

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