PPP Loan Forgiveness
Below you can access information about federal, state, city and private resources in regards to coronavirus (COVID-19).
The PPP program closed on May 31st, 2021. If you received funding through this program, details on loan forgiveness are below.
As of 8/4/21, some borrowers may apply for PPP forgiveness directly through the SBA.
Click here to access the direct forgiveness portal and click here to determine if your lender is participating.
For detailed instructions on how to use this portal, check out the Direct Forgiveness Portal User Guide.
The SBA & the U.S Department of the Treasury offer three separate Paycheck Protection Program (PPP) loan forgiveness applications and related instructions. These documents will help small businesses seek forgiveness at the conclusion of the Covered Period or the Alternative Covered Period, both of which begin with the disbursement of their loans.
PPP forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. The PPP loan will be fully forgiven if, during the applicable Covered Period or Alternative Covered Period, PPP loan funds are used for payroll costs, interest on mortgages, rent, and utilities and at least 60% of the forgiven amount is used for payroll. The loan forgiveness Covered Period or Alternative Covered Period is either 1) 24 weeks after the date of loan disbursement, or through Dec. 31, 2020, whichever comes first. Borrowers who received PPP loans prior to June 8th, 2020 have the option to use the original 8-week covered period.
Forgiveness will be reduced if full-time equivalent headcount declines, or if salaries and wages decrease. There is a “safe harbor” from reductions in loan forgiveness based on reductions in full-time employees if the Borrower is unable to 1) resume level of pre COVID-19 business activity due to worker or customer safety compliance issues; or 2) rehire individuals/hire similarly qualified employees for unfilled positions by December 31, 2020.
See below for the three categories, including some basic guidelines for determining which one of three PPP Loan Forgiveness Applications a Borrower may submit:
1) PPP Loan Forgiveness Form 3508S
A Borrower may use this form only if the Borrower received a PPP loan of $50,000 or less.
A Borrower that, together with its affiliates, received PPP loans totaling $2 million or greater cannot use this form
2) PPP EZ Loan Forgiveness Application Form 3508EZ
This version requires fewer calculations and less documentation than the standard Paycheck Protection Program Loan Forgiveness Application. The EZ Form is for borrowers who:
Are self-employed and have no employees; OR
Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; OR
Experienced reductions in business activity as a result of health directives related to COVID-19 and did not reduce the salaries or wages of their employees by more than 25%
3) PPP Loan Forgiveness Application Form 3508
For additional helpful resources related to the PPP Forgiveness process, check out:
The September 3rd, 2020, ask the regulators SBA session: Basics of Paycheck Protection Program (PPP) Loan Forgiveness and the Small Business Administration (SBA) PPP Loan Forgiveness Platform
America's SBDC blog post regarding forgiveness updates.
We know navigating different COVID-19 relief programs can be challenging. The Pace University SBDC is here to help. Contact us to schedule a no-cost, one-on-one business counseling session.