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  • Writer's pictureMichael A Beattie

PPP Loan Forgiveness

Updated: Dec 1, 2020


To all Business Clients:

Now is the time to start preparing for PPP Forgiveness. To summarize the information below, here are the forms that likely apply to your business:

  • Receive an SBA PPP Loan of $50,000 or Less: You may use the SHORT Application: Form 3508S (1 page affidavit)

  • Receive over $50,000 and are a self-employed individual, independent contractor, or sole proprietor who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form or did not reduce Employee hours by more than 25%: Use Form 3508EZ

  • All other situations: Use Form 3508

We are here to help you with this process. If you would like us to assist you with your PPP Forgiveness application, please let me know and we will be glad to assist.

How to Apply for Loan Forgiveness

1. Contact your PPP Lender and complete the correct form

Your Lender can provide you with either the SBA Form 3508, SBA Form 3508EZ, SBA Form 3508S, or a Lender equivalent.

The 3508EZ and the 3508S are shortened versions of the application for borrowers who meet specific requirements. Your Lender can provide further guidance on how to submit the application.

Forgiveness Forms and Instructions

  • SBA Form 3508 Paycheck Protection Program Loan Forgiveness Application (Spanish version)

    • Instructions for the SBA Form 3508 Paycheck Protection Program Loan Forgiveness Application


  • SBA Form 3508EZ Paycheck Protection Program Loan Forgiveness Application

    • Instructions for the SBA Form 3508EZ Paycheck Protection Program EZ Loan Forgiveness Application


  • SBA Form 3508S Paycheck Protection Program Forgiveness Application

    • Instructions for the SBA Form 3508S Paycheck Protection Program 3508S Forgiveness Application


Please Note:

If applicable, SBA will deduct any EIDL advance amount you have received from the forgiveness amount remitted to the Lender, as required by section 1110(e)(6) of the CARES Act. Borrowers are required to retain certain documents for six years after the date the loan is forgiven or repaid in full.

2. Compile your documentation

Payroll (provide documentation for all payroll periods that overlapped with the Covered Period or the Alternative Payroll Covered Period):

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

  • 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.


  • 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.

Non-payroll (for expenses that were incurred or paid during the covered period and showing that obligations or services existed prior to February 15, 2020):

  • Business mortgage interest payments: Copy of lender amortization schedule and receipts verifying payments, or lender account statements.

  • Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments.

  • Business utility payments: Copies of invoices and receipts, cancelled checks or account statements.

This list of documents required to be submitted to the Lender is not all-inclusive.

3. Submit the forgiveness form and documentation to your PPP Lender

Complete your loan forgiveness application and submit it to your Lender with the re­quired supporting documents and follow up with your Lender to submit additional documentation as requested. Consult your Lender for additional guidance and provide requested documentation in a timely manner.

4. Continue to communicate with your Lender throughout the process

If SBA undertakes a loan review of your loan, your Lender will notify you of the review and the SBA loan review decision. You have the right to appeal certain SBA loan review decisions. Your Lender is responsible for notifying you of the forgiveness amount paid by SBA and the date on which your first payment will be due, if applicable.

FROM TRUIST BANK:

Good news! Your Paycheck Protection Program (PPP) loan forgiveness application is now available in the PPP Client Portal. Before you apply, we want to make sure you’re aware of pending legislation that, if passed, could make your loan forgiveness process easier by reducing or eliminating documentation requirements. It's completely up to you if you'd like to apply now or later, but you could experience a more rigorous forgiveness process, and potentially a less favorable outcome in terms of the amount of your loan that is ultimately forgiven if you apply now. Also, if your loan was funded before June 5, 2020, you can choose an 8-week or 24-week Covered Period. While it’s your decision which timeframe to use, electing a 24-week Covered Period provides you with more opportunities to spend your loan on qualifying expenses. An 8-week Covered Period might result in a less favorable outcome in terms of the amount of your loan that is ultimately forgiven. Now, a few tips to help you prepare your PPP loan forgiveness application: Prepare for success To receive loan forgiveness, you’ll need to provide detailed documentation about how you used your loan.1 All your supporting documentation should contain identifiers for your business. We know supporting documentation can be substantial based on the requirements from the Small Business Administration (SBA). To avoid additional phone calls or emails from your application reviewer, please clearly identify the expense amounts that are tied to each expense category in your forgiveness application. Since each expense category has only one placeholder to upload documents, we suggest merging multiple supporting documents into one single file before to uploading. Examples of documentation for payroll expenses:

  • Cash compensation documents

    • The best compensation document to submit is the custom PPP forgiveness payroll reports that many third-party payroll providers have developed. If you use one of these payroll providers and they offer this report, please submit it as part of your required documentation.

    • If a PPP payroll report is unavailable, please provide payroll reports with appropriate summary total pages correlated with your Covered Period. Clearly identify the expense amounts that are tied to your forgiveness application, for example, indicating specific line items will streamline your forgiveness process.

    • IRS payroll tax filings, typically IRS 941, along with bank account statements can also be used to show employee compensation.

    • Cash compensation for employees should not contain owner compensation. This should be captured only on the owner compensation line.


  • Non-cash compensation documents

    • Non-cash compensation documents include payment receipts, cancelled checks, or account statements for employer contributions to employee health insurance and retirement plans.

    • Documents showing the total amount paid by employers for employee health insurance should only include employer contributions to a self-insured, employer-sponsored group health plan, excluding any pre-tax or after-tax contributions by employees.

    • Documents showing the total amount paid by employers to employees’ retirement plans should exclude any pre-tax or after-tax contributions by employees.

    • Expenses paid for owner’s health insurance and retirement plans are not allowable.

    • Documents showing total amount paid for employer state and local taxes assessed on employee compensation, such as state unemployment insurance tax, should not list any taxes withheld from employee earnings.


Examples of documentation for non-payroll expenses:

  • Mortgage

    • Documents showing mortgage payments should only include mortgage interest payments for any business mortgage obligation on real or personal property incurred before February 15, 2020. Mortgage principal and prepayments are not eligible for forgiveness.

    • Mortgage amortization schedules during the Covered Period showing evidence of obligations.

    • Payment receipts, cancelled checks, invoices, bank statements as proof of payments.


  • Rent

    • Lease agreements or account statements showing obligation existence prior to February 15, 2020.

    • Lease agreements or account statements during the Covered Period showing evidence of obligations.

    • If the lease agreements indicate a monthly rent amount that is different from the actual current rent payments, please also provide updated documents to show the current rent amount due.


  • Utilities

    • Invoices evidencing utilities were in service prior to February 15, 2020.

    • Billing statements during the Covered Period showing evidence of obligations.

    • Payment receipts, cancelled checks, invoices, bank statements as proof of payments.


A complete list of required documents can be found in the instructions for both the SBA Forms 3508 and 3508EZ.

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