Important Update 3/5/2021: SBA Issues New PPP Loan Rules

What borrowers are impacted by the new rules?

• Primarily Sole Proprietors and Single Member LLC’s who report business income on IRS Form 1040 Schedule C
• Paycheck Protection Programs loans approved by SBA after the effective date (March 3, 2021) of this rule.

What are the new rules?

• Allows individuals who file an IRS Form 1040, Schedule C to calculate their maximum loan amount using gross income (generally line 7) instead of net income (generally Line 31)

A new application form is required by the SBA for borrowers using Schedule C gross income in determining their loan amount

• It will take a few days for the Liberty Bank portal to have the new forms, SBA Form 2483-C and SBA Form 2483-SD-C, available for use.  Please check the website for updates on the availability of the new forms.

If you are an impacted borrower what action should you take?

• For those borrowers who have submitted an application that has not yet been approved by the SBA, withdraw the application and resubmit using the new form. ¹
• For those borrowers who have been approved by the SBA but whose funds have not yet been disbursed, request that the loan be cancelled and resubmit using the new form. ^{1, 2}
• For those borrowers who have been approved by the SBA and funds have been disbursed but the Lender has not submitted its Form 1502, (mandated ongoing Bank reporting to the SBA) request that the loan be cancelled, repay the loan, and resubmit using the new form.^{1, 2}
• Important – Any loan that has been approved by the SBA, disbursed by the Lender, and the Lender has filled the SBA Form 1502 (mandated ongoing Bank reporting to the SBA) is ineligible under the changes currently proposed by the SBA.

If you have any immediate questions please email us at paycheckprotectionprogram@liberty-bank.com

If you are not impacted by these changes, you can continue your application as is and provide documentation as needed, and Liberty will continue to process it.

¹ As stated above, it will take a few days for the Liberty Bank portal to have the new forms, SBA Form 2483-C and SBA Form 2483-SD-C, available for use.  Please check the website for updates on the availability of the new forms.

² Please note that it may take up to 2 business days for the cancelled loan to take effect in ETran (SBA’s Loan Platform) before a new loan application can be resubmitted.

Important Update 2/23/2021: PPP Changes Announced by President Biden

We know many of you have questions about the latest PPP changes announced by the SBA (see the White House fact sheet).  Here are a few salient updates:

On Monday February 22nd, President Biden modified the PPP Loan Program mandating an exclusivity period for potential borrowers with fewer than 20 employees.  Beginning at 9 a.m. ET on February 24 and lasting through the end of March 9, Liberty Bank and all PPP lenders will only be able to submit to the SBA loan applications for borrowers with fewer than 20 employees. The SBA has confirmed the requirement is less than 20 employees, so borrowers with 20 or more employees do not qualify during this timeframe. If you submit an application during this period and you have 20 or more employees, we will not submit your application to the SBA as it will be rejected due to President Biden’s mandate. If this two week exclusion applies to you, we welcome you to submit your loan applications but remember we will not be able to submit your request to the SBA until the two-week period ends.

Business Customers: 

Small Business & Commercial Banking Customers

• Unlimited number of transfers and withdrawals are now allowed from your money market and savings accounts. 
• Liberty Bank’s small business and commercial banking customers are eligible for various types of loan payment assistance, including but not limited to immediate loan payment deferrals, interest only payments, further credit extensions or other forms of assistance.
• Small business and commercial banking customers who are experiencing financial hardship should call the Customer Service Center at 1.888.570.0773 to discuss these relief options.
• As always, Liberty will work with their small business customers if they need any assistance in pursuing other options they may be eligible for, including opportunities through the U.S. Small Business Administration (SBA) or other existing programs.

Additional Assistance for Customers

• If Liberty customers seek other assistance not listed above, call the Bank’s Customer Service Center at 1.888.570.0773. The Liberty team is ready to take your call and find solutions to fit your needs at this critical time.

More information about financial hardship relief

Personal Customers:

Consumer Lending Customers

• Liberty Bank consumer loan customers are eligible for various types of loan payment assistance, including immediate loan payment deferrals. For more information, call Liberty’s consumer loan team at 1.800.354.8950.

Credit Card Customers 

• Customers with Liberty Bank credit cards are eligible for financial relief, including fee waivers for late fees, over limit fees and rush card requests. Contact Cardmember Services at 1.800.558.3424.

Consumer Banking Customers

• Customers may be eligible for certain fee waivers. Call Liberty’s Customer Service Center at 1.888.570.0773 for help.
• Customers can request increases in debit card limits and remote deposit check limits. Call Liberty’s Customer Service Center at 1.888.570.0773 to make the request.
• Unlimited number of transfers and withdrawals are now allowed from your money market and savings accounts. 

IRA and Retirement Plan Changes in the CARES Act

The Coronavirus Aid, Relief, and Economic Security (CARES) Act recently passed by Congress and signed into law by the President contains a few provisions regarding rule changes for retirement plans that you should be aware of:

• Required minimum distributions (RMDs) are suspended for 2020.  All RMDs are suspended, including those for inherited IRAs as well as traditional IRAs of those over 70 ½.
• Due to the tax return filing deadline for 2019 income tax returns being extended to July 15^th, 2020, the deadline for making a 2019 contribution to an IRA (or HSA) is also extended to July 15^th.
• Please be advised to consider carefully about whether to take advantage of this suspension and to consult with your tax professional.  If you have already taken your 2020 RMD, you have the option to keep it or return it to the IRA.
• Additionally, the 10% penalty for taking early distributions from qualified retirement plans, including IRAs and 401(k)s has been waived.  This wavier applies to distributions taken between January 1, 2020 and December 31, 2020.  Up to $100,000 of distributions avoids the penalty.

Additional Assistance for Customers

• If Liberty customers seek other assistance not listed above, call the Bank’s Customer Service Center at 1.888.570.0773. The Liberty team is ready to take your call and find solutions to fit your needs at this critical time.

More information about financial hardship relief