Information and insights from HSBC US to help your business navigate the impact of novel coronavirus, with updates as the situation evolves.
Assisting our customers with PPPPPP funds are now fully allocated and the SBA is no longer accepting applications. As a result, we are no longer accepting PPP loan applications and we are no longer able to submit applications to the SBA.
PPP Forgiveness UpdatesAs of January 19, 2021 the SBA has published new PPP forgiveness applications. On March 8, HSBC will be launching the new applications in HSBC SmartServe. Customers will receive an email from HSBC SmartServe when the new forgiveness process opens and they can begin applying for forgiveness. HSBC can be accessed at: https://smartserve.hsbc/. If you do not have access to HSBC SmartServe, please review the information below to initiate the process as soon as possible.
At the bottom of the FAQs you will find helpful links to the SBA and Treasury department IFRs and FAQs
Updated as of September 22, 2021
Congress revived the Paycheck Protection Program (PPP) as part of the $900 billion COVID-19 relief bill (i.e. Consolidated Appropriations Act, 2021) that was signed into law on Dec. 27. This legislation includes the Economic Aid Act which extends the authority to make PPP loans through May 31, 2021 and revives the PPP with many of the same parameters as the 2020 first CARES ACT program, there are several important differences.
There are 4 primary components of the Economic Aid Act:
1. New PPP funding for companies who did not receive a PPP loan in round one
2. A second draw of funding for companies who did received a PPP loan in round one
3. An expansion of additional eligible expenses to be included for PPP loan forgiveness
4. A simplified forgiveness process for PPP loans under $150,000
The Covered Period begins on the origination date of your PPP loan — which is also the date HSBC disbursed the funds to you — and ends on a date you select that is between 8 and 24 weeks after the date your loan was disbursed.
You can find the interest rate and term period for your PPP loan in your SBA note.
If you received a PPP loan from HSBC and are considering a sale of all or part of your business, whether via a stock sale or asset sale, or a change in ownership (of any percentage) please contact your HSBC Relationship Manager as soon as possible. Certain approvals from HSBC and/or the SBA are required for changes in ownership and sales of the business in part or full, and taking action without prior approval could result in a default under your PPP loan documents and SBA program requirements. You also remain responsible for the PPP loan regardless of an ownership change. Additionally, you remain responsible for obtaining, preparing, and retaining all required PPP forms and supporting documentation and providing those forms and supporting documentation to us or to the SBA upon request The SBA has outlined its required procedures for changes of ownership of an entity that has received PPP funds in the following procedural notice: https://home.treasury.gov/system/files/136/PPP-Procedural-Notice-PPP-Loans-and-Changes-of-Ownership.pdf. Your PPP loan documents also contain HSBC consent requirements in excess of the PPP procedural notice requirements, and should be reviewed prior to undertaking any transaction.
The calculations and other information in your forgiveness application and the determinations and certifications you make in connection with your application are your responsibility, so we strongly encourage you to consult with your accounting, legal and other advisors in preparing your forgiveness application. They can provide guidance on application related questions and determinations, including:
It depends on what question you have and what step of the process you are in:
Forgiveness is not automatic.
You must elect to apply for loan forgiveness. If you received your PPP loan through HSBC you will apply for loan forgiveness through HSBC SmartServe our centralized platform to manage the PPP loan forgiveness process, including related tasks, documents and communications.
To login visit https://smartserve.hsbc/ and enter your existing HSBCnet username and Security Device passcode (generated by your physical Security Device not via mobile app).
In order to access HSBC SmartServe for PPP loan forgiveness you will need to have an active HSBCnet username as well as have your physical Security Device.
Please email Caresact.hsbc@us.hsbc.com to request assistance with HSBC SmartServe access issues.
For help activating a new HSBCnet username, please use the below guides:
In order to access HSBC SmartServe for PPP you need an active HSBCnet username and your physical security device.
Access to HSBC SmartServe is not automatically granted to all existing HSBCnet users.
If you have already been granted access to HSBC SmartServe and are still having problems logging in, please:
1. Make sure that you are able to successfully login to HSBCnet. If you are not able to login to HSBCnet, please contact the HSBCnet help desk at 888-685-4357. Once you successfully log in to HSBCnet, try to log in to HSBC SmartServe again.
2. Clear your cookies/cache and try again.
3. Try another browser
If none of the above steps work, please send an email to Caresact.hsbc@us.hsbc.com
If your PPP loan received an SBA loan number on or after June 5, 2020, the loan has a five-year maturity. If your PPP loan received an SBA loan number before June 5, 2020, the loan has a two-year maturity, unless you and HSBC mutually agree to extend the term of the loan to five years. The promissory note for the PPP loan will state the term of the loan. If you have questions about an extension or want to request an extension from 2 to 5 years, please use the comment function within HSBC SmartServe to ask our team.
On June 5, 2020, the Paycheck Protection Program Flexibility Act of 2020 (Flexibility Act) was signed into law, amending the CARES Act. One of the changes under the Flexibility Act is to PPP loan payment deferrals. As a result of the Flexibility Act, your first payment date may be different than what is stated in your U.S. Small Business Administration Note. We will update you with your first payment date via email. The general rules are:
Up to 100% of the principal amount of a PPP loan plus accrued interest may be forgiven if you use the loan funds for forgivable uses over a 24-week period beginning on the date your PPP loan was disbursed (or for those borrowers whose loan was made before June 5, 2020, you may elect to have your loan forgiveness covered period be the eight-week period beginning on the date your PPP loan was disbursed).
To receive full loan forgiveness, you must use at least 60 percent of the PPP loan for eligible payroll costs, and not more than 40 percent of the loan forgiveness amount may be attributable to eligible non-payroll costs.
For example, if a you receive a $100,000 PPP loan, and during the covered period you spend $54,000 (or 54 percent) of the loan on payroll costs, then because you used less than 60 percent of your loan on payroll costs, the maximum amount of loan forgiveness you may receive is $90,000 (with $54,000 in payroll costs constituting 60 percent of the forgiveness amount and $36,000 in non-payroll costs constituting 40 percent of the forgiveness amount).
There are certain actions that may reduce the amount of forgiveness you qualify for, such as reducing the number of employees you have or reducing employee salaries or wages. (See below FAQs for more details)
The funds from PPP loans are not lines of credit. Any pay down or payoff of the PPP loan funds would permanently reduce the loan balance.
Please contact your accountant for specifics.