PPP Loan Forgiveness FAQs

To qualify for loan forgiveness, PPP funds must be used for the following expenses, and they must have been billed or incurred in the 8-week or 24-week period (the "covered" period") from the date you received your loan funds (disbursement date):

• At least 60% of the funds must be spent on payroll costs, including employee benefits
• No more than 40% of the funds can be spent on:
  • Interest on mortgage obligations, where the mortgage obligations originated before February 15, 2020
  • Rent, under lease agreements in force before February 15, 2020
  • Certain utilities, for which service began before February 15, 2020
  • Operating expenditures, property damage costs, supplier costs, and worker protection expenditures

Payroll costs include:

• Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee)
• Employee benefits, including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits, including insurance premiums; and payment of any retirement benefit
• State and local taxes assessed on compensation of employees
• For a sole proprietor, independent contractor, self employed individual and farm/ranch: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee. Farm/ranch may use gross income from Schedule F, line 9

Yes. You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, utilities payments, operating expenditures, property damage costs, supplier costs, and worker protection expenditures over the 24 weeks triggered after you received the loan. Payroll costs must represent at least 60% or the forgiveness amount.

You may also owe money if you do not maintain your staff and payroll, such as:

• Your loan forgiveness may be reduced if you decrease your full-time employee headcount.
• Your loan forgiveness may also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
• You may be able to avoid a reduction in forgiveness if you restore your full-time employment and salary levels by. You may also be able to avoid a reduction in forgiveness if you can document an inability to return to your standard level of business activity due to compliance with COVID-19 requirements or guidance issued by the Centers for Disease Control (CDC) or other specific federal entities.

Proceeds that are not forgiven must be repaid pursuant to your promissory note, and can only be spent on the following:

• At least 60% of the loan proceeds must be used for payroll costs.
• The remaining 40% of loan proceeds may be used for the following:
  • Mortgage interest payments on debt obligations incurred before February 15, 2020 (but not mortgage prepayments or principal payments);
  • Rent payments on leases dated before February 15, 2020;
  • Utility payments (i.e. electricity, gas, water, telephone, internet) under service agreements dated before February 15, 2020;
  • Interest payments on any other debt obligations that were incurred before February 15, 2020
  • Operating expenditures, property damage costs, supplier costs, and worker protection expenditures

If you use PPP funds for unauthorized purposes, SBA will direct you to repay those amounts. If you knowingly use the funds for unauthorized purposes, you could be subject to additional liability such as charges for fraud.

We have developed a streamlined version of the forgiveness application.  If you are ready to apply for forgiveness, please contact your local lender. Otherwise, we will send you an email invitation to begin the forgiveness process. You will be able to complete your application for forgiveness and submit the required documentation directly to us using the email invitation.