SBA PPP Loan Forgiveness (Latest update as of 07/01/2020)
- Guidelines are subject to change per the SBA. For the most up to date information, please visit the SBA PPP website and the US Treasury Website
- The SBA PPP Loan Forgiveness Application and process is subject to change between now and the time you may submit your request for forgiveness.
- You may want to consult with your accountant, payroll processor, and/or attorney in the application preparation process.
The PPP program was intended to be a short-term forgivable loan established to support paycheck protection for small businesses through the COVID-19 pandemic. For PPP loans made before 6/5/20, borrowers and Fresno First Bank must mutually agree to extend the maturity. We recognize there are those that may need extended terms, however at this time all Paycheck Protection Program loans granted prior to 6/5/20 will mature in 2 years from the date of funding.
Through the implementation of the Paycheck Protection Program Flexibility Act, borrowers now have two application options for loan forgiveness.
- SBA PPP Loan Forgiveness Application SBA Form 3508 (06/20) - this is very similar to the previously released version labeled as SBA Form 3508 (05/20) reflecting changes approved by Flexibility Act. Instructions are located here.
- SBA PPP Loan Forgiveness Application SBA Form 3508EZ (06/20) - newly introduced application intended to simplify loan forgiveness for those who qualify. Please refer to the Checklist within the instructions to determine if you qualify for this simplified application form. Instructions are located here.
SBA PPP Loan Forgiveness Guidelines (as of 07/01/2020)
- You can submit for forgiveness prior to the end of your covered period. You do not need to wait to the end of your covered period if you have used all the PPP funds.
- You are highly encouraged to read all of the IFR’s relating to PPP Loan Forgiveness including but not limited to the below links. Topics include: how reductions in forgiveness will be calculated, employee retention and SBA’s discussion of audits and ineligible loans.
- Should additional time be needed to exhaust PPP loan funds, the loan forgiveness covered period is extended to 24-weeks beginning on the date the PPP loan is disbursed.
If you have received an invitation to the portal or are preparing for forgiveness where do you start?
- First you must decide which application is applicable for your loan forgiveness request. To qualify for the 3508EZ application you must be able to check at least one of the following:
- If you determine that the 3508EZ application is appropriate
- If you determine the 3508 application is more appropriate
- Complete and upload the entire SBA PPP Loan Forgiveness Application SBA Form 3508 (06/20). Instructions are located here.
- Collect and upload the required documentation as detailed in the application instructions on page 6.
- All documentation must be submitted through our online portal.
What happens after you submit the Loan Forgiveness Application?
- If errors are noted or questions arise when reviewing the Forgiveness documentation provided, the Bank will contact you.
- You will receive a notification from the Bank within 60 days after receipt of your COMPLETED package. This notification will indicate the status of your application as either approved in whole, approved in part or denied.
- Once a decision has been reached, the request will be submitted to the SBA. SBA is then allotted 90 days to review the request and send the forgiven amount to the Lender to settle the loan balance.
- The SBA and US Treasury reserves the right to audit any SBA PPP Loan application. If your loan is being audited by the SBA you will be informed by the Lender and additional information will be requested at that time. If your loan is being audited, a decision on forgiveness will be delayed.
- Please be advised that you are required to retain all PPP Loan records for up to 6 years after the loan is forgiven or paid in full.
Forgiveness Portal Tips
- You may submit once the funds are exhausted, even if it is prior to the end of your covered period.
- Be sure to check your spam for emails from the Bank providing your invite to the portal as well as the email containing SBA and Bank loan numbers which are needed to complete the application.
- Documentation required for upload is labeled based on the application instructions documentation requirements page. Please be sure to review the application instructions documentation requirements page for specifics on what to collect to satisfy forgiveness requirements as set forth by SBA and Treasury.
- Be sure to collect everything needed ahead of time per the documentation requirements. Pay special attention to “and” vs. “or” to make sure you have collected everything necessary.
- To satisfy some categories you will need to gather multiple types of documents. Scan all related items together in one document for upload. For instance the Payroll B category for Tax Forms during the covered period, payroll tax filings and state quarterly employee wage reporting is required. You would collect all of the forms for this category and scan them all together for the upload.