PPP Forgiveness Application

GETTING STARTED GUIDE

Disclaimer

PPP Forgiveness is an evolving process, subject to change as further guidance comes out from the SBA and US Treasury.

This presentation is for general information purposes only and should not be relied upon as a substitute for obtaining independent advice or undertaking independent research before starting the process to apply for PPP forgiveness. This presentation does not take into account any particular borrower’s situation or needs.

All PPP Borrowers should obtain professional advice based on their unique situation before proceeding with the forgiveness process. In addition, any implied projections or views of the hosts are their own personal opinions and are not the official position of CenterState Bank, N.A., Cherry Bekaert LLP or their respective directors or successors or assigns, and may not prove to be accurate. While the information contained herein is believed to be accurate as of the date of production, the information is subject to change and revision.

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Before You Start

1. Documents: It is helpful to have your documents ready. We will talk more about your documents in the back part of this Checklist.

2. Chrome:. While the PPP Portal works with Microsoft Edge, Safari, Explorer, and Firefox (in that order), our PPP Portal works best using Chrome. You can download it here: https://www.google.com/chrome/

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Getting Ready

1. Getting a Portal Link: We will send you a link via email to our portal. We will space these invites out in order to balance the customer service load.

2. Credentials: If you have used the SmartBiz portal for PPP origination, then you will simply log in using your existing credentials (or you can reset in case you forgot). If you are new to the Portal, then you will register and choose your credentials (below).

3. Starting and Stopping: You can start and stop the application process at any time. The Portal will automatically save all your work.

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If You Need Help

1. Check with your professionals: Since we cannot understand every company’s situation, it is best that you ask specific questions to your certified public accountant, lawyer or advisor.

2. PPP Forgiveness Education: Be sure to check our PPP Forgiveness webpage where we have our recorded webinars, videos and supporting information. This page can be found at the top of every CenterState webpage or directly at: https://www.centerstatebank.com /ppp-loan-forgiveness/

3. Chat: At the bottom of each PPP webpage, you will find chat functionality in the bottom righthand corner. During business hours, if you need help click the “Talk to a PPP Expert” and you will be connected to someone on our Forgiveness Customer Care Team.

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More Help

4. Email: If you prefer email, you can email PPPSupport@CenterStateBank.com and you should quickly get a response (within the hour) during normal business hours.

5. Phone: If you would like to speak with someone directly on our Forgiveness Customer Care Team, you can call toll free 833-771-1364 during normal business hours.

6. Business Hours: At a minimum, we will staff from 8am to 7pm Monday through Friday Eastern Time and from 9am to 5pm on Saturday. In addition, we look to have extended hours, particularly on Live Chat during heavy filing times. Be sure to check our Forgiveness webpage to see if a Forgiveness Team Member is online.

The U.S. Treasury Website: When in doubt, be sure to check the “root of all PPP knowledge” which is the U.S. Treasury’s PPP website that can be found here: https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses

There you can find further instructions, frequently asked questions (FAQs), guidance for borrowers and more.

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Setting Expectations

Just to set expectations - the PPP Origination Phase had light to moderate documentation requirements (e.g., quarterly 941’s and/or payroll report from reputable payroll service provider). Unfortunately, PPP Forgiveness takes many more documents and organization. Imagine you’re creating an audit work paper file. That means that if

you are claiming an amount in your forgiveness application, you want to be able to show everyone where that amount came from.

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Let’s Get Started

Once You Log in: The CenterState SmartBiz Portal is driven by a wizard (below) that will walk you through each step. It will tell you what information goes where, what documents are needed and when to upload those documents.

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Knowing Your Way Around

Easy To Use: While PPP Forgiveness is not the easiest process to understand, we tried to make this as easy as possible to use. A progress bar will walk you through each section and pop-out boxes will provide additional detail (Example 1 below).

Progress bar provides

transparency

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Pop-out boxes provide in-app detail

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Explaining Where and How

The Layout: Each expense section will follow a similar format: 1) Enter your data (example on the previous page); 2) Provide Documentation; and, 3) Explain your calculation. Explaining your calculation is critical to speed up the process. We want to know WHERE we can find the evidence to support your calculation on your documents and HOW you arrived at that calculation. Explain where and how clearly, and your application will be easier to approve.

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3

Easy drag & drop upload

boxes

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The CenterState PPP Document Checklist Excel File

More Where and How: To further help communicate your calculations, it is highly recommended that if your loan is over $150,000 OR your documents are complicated (multiple payroll reports, mortgages, or utility bills from many properties), that you utilize our Microsoft Excel-based “CenterState PPP Document Checklist.” This Excel worksheet allows you to list multiple documents, highlight the supported amounts and leave detailed notes for the Reviewer. If you use this form, you DO NOT have to include detailed explanation at the end of each Portal section (but you do need to input something so we suggest a simple – “See Excel file.”

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Decide On Your Covered Period

1. The start of Your Covered Period: Your Covered Period will start either on the funding date of your loan or, if your payroll is bi-weekly, weekly or more often, at the start of the next payroll cycle. This is called your “Alternative Covered Period.”

2. 8-Week vs. 24-Week: You will choose either the common 8-week period or, if you need more time to maximize forgiveness the 24-week period.

3. Filing Before the end of the 24 weeks: If you choose the 24-week period, you can file when you have maximized forgiveness even if it is sooner than the end of the 24-week Covered Period. If you do file before 24 weeks, then only upload documents that pertain to the period in which you are filing. For example, if you are filing at the end of 12 weeks, then just include documents that support the 12 weeks.

4. End of the 24-week Covered Period: Note, your Covered Period cannot go past 12/31/20.

8-week Covered Period

For bi-weekly or weekly (not semi-monthly) 8-week Alternative Covered Period payroll cycles.

24-week Covered Period

Dec. 31st

PPP Funding Date (Prior to June 5)

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Supporting 100% Forgiveness

100% Payroll: Remember, your entire loan can be forgiven showing that you used 100% of the loan proceeds for Payroll. However, if that is not enough, you can include other qualifying expenses as long as the payroll portion makes up 60% or more of your total loan amount.

60%+ Payroll 40% or less in Other

• Salaries, wages, tips, bonuses, etc. • Mortgage payments • Hazard pay • Business Lease/rental payments • Vacation & sick pay • Utilities (gas, water, power, etc.) • Parental and family leave (not FFCRA wages) • Internet • Group medical (not employee’s portion) • Transportation costs (e.g. gas for • Retirement benefits (e.g. 401k match, SIMPLE IRA) paid delivery vehicles)

by employer

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Summary: Qualifying Payroll Expenses

Below are examples of expenses that qualify for payroll expenses.

Salaries and Wages (even if paid through a PEO) Tips Bonuses, commissions, & incentives Hazard pay Vacation pay Parental and family leave (not FFCRA wages) Sick leave Group Medical benefits paid by employer (not the

employee’s portion) Retirement benefits (e.g. 401K match, SIMPLE IRA) paid by

employer

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Summary: Non-Qualifying Payroll Expenses

Below are examples of expenses that DO NOT qualify for payroll expenses.

1099 contract workers Employees that are paid by another company Social security taxes Medicare taxes Cost of managing payroll (third-party expenses to payroll

firms, bookkeepers, etc.)

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How To Document Qualifying Payroll Expenses

For payroll (in order of preference):

1. IRS Quarterly Form 941’s that overlap the entire covered period

2. Payroll reports/schedules from payroll provider 3. Bank statements showing payroll debits 4. Cancelled checks or other evidence of payments 5. Schedule of employees with name, employee number,

compensation and period of time

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How To Document Qualifying Benefits Expenses

For benefits-related expenses:

Healthcare or retirement benefit statements Bank statements showing healthcare and retirement benefit debits Payment receipts, cancelled checks, etc. for health & benefit

expenses

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How To Document Safe Harbor Exemptions

While you do not need to upload evidence, we will ask you some questions (below) to help you calculate any Safe Harbor exemptions. Please consider keeping the below documents for your records to support this exemption.

Position declines, resignations, termination, etc. evidence Notices of reduction of hours Offer letters/emails or advertising (LinkedIn, local ads, etc.) trying to

hire back the position Narrative documenting what occurred including names, dates, and

details on the position

Reduction Quotient Auto-Calculated

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Documents That Must Be Submitted

3508 (Standard) 3508EZ

PPP Loan Forgiveness PPP Loan Forgiveness Calculation Form 3508 Calculation Form 3508EZ PPP Schedule A Payroll Documentation Payroll Documentation Non-payroll Documentation FTE Documentation Non-payroll Documentation ***No Schedule A, No FTE

Docs***

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Payroll Documentation · 3508

Here is the payroll documentation required: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or the Alternative Payroll Covered Period consisting of each of the following:

1. Bank account statements OR third-party payroll service provider reports documenting the amount of cash compensation paid to employees.

2. Tax forms (OR equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period: Payroll tax filings reported, or that will be reported, to

the IRS (typically, Form 941); and State quarterly business and individual employee wage

reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.

3. Payment receipts, cancelled checks, OR account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the Borrower included in the forgiveness amount (PPP Schedule A, lines (6) and (7)).

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Payroll Documentation · 3508EZ

The same as required for the standard 3508 plus

If you checked only the second box on the checklist on page 1 of the instructions, the average number of FTEs on payroll employed on January 1, 2020 and at the end of your Covered Period.

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FTE Documentation

1. 3508 (Standard) Only 2. Documentation showing (at the Borrower’s election): the average number of FTE employees on payroll per week

employed by the Borrower between February 15, 2019 and June 30, 2019;

the average number of FTE employees on payroll per week employed by the Borrower between January 1, 2020 and February 29, 2020; or

in the case of a seasonal employer, the average number of FTE employees on payroll per week employed by the Borrower between February 15, 2019 and June 30, 2019; between January 1, 2020 and February 29, 2020; or any consecutive 12-week period between May 1, 2019 and September 15, 2019.

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FTE Documentation

1. The selected time period must be the same time period selected for purposes of completing PPP Schedule A.

2. Documents may include payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941) and state quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.

3. Documents submitted may cover periods longer than the specific time period.

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Non-Payroll Documentation

1. Applies to 3508 and 3508EZ 2. Documentation verifying existence of the

obligations/services prior to February 15, 2020 AND eligible payments from the Covered Period. Business mortgage interest payments: Copy of lender

amortization schedule AND receipts OR cancelled checks verifying eligible payments from the Covered Period; OR lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments.

Business rent or lease payments: Copy of current lease agreement AND receipts OR cancelled checks verifying eligible payments from the Covered Period; OR lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.

Business utility payments: Copy of invoices from February 2020 AND those paid during the Covered Period AND receipts, cancelled checks, OR account statements verifying those eligible payments.

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Document Retention Requirements

The SBA requires Borrowers to retain all records relating to their PPP loan for six (6) years after the date the loan is forgiven orrepaid in full. 1. Borrowers would be expected to retain in their files: Documentation submitted with its PPP loan application; Documentation supporting the Borrower’s certifications as

to the necessity of the loan request and its eligibility for a PPP loan;

Documentation necessary to support the Borrower’s loan forgiveness application; and

Documentation demonstrating the Borrower’s material compliance with PPP requirements.

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You Got This

We know this process isn’teasy and we know times aredifficult.

We are committed to doingeverything we can to makeunderstanding the PPPForgiveness process easier. We are standing by ready to support you.

If there is anything we can helpwith, check out our web page,read through this document and feel free to reach out to the contact channels listed in the front of this document.

We are standing by ready to help.

Your CenterState Team