PPP Loan Forgiveness
The Small Business Administration has provided information regarding the Paycheck Protection Program (PPP) loan forgiveness process. FNBN will respond to your forgiveness request within 60 days of receiving your complete application and supporting documents. SBA will then have an additional 90 days to determine your forgiveness amount and submit payment to FNBN to reduce your loan. Rules/Guidance are subject to change per US Treasury or SBA.
Directions for completing PPP Loan Forgiveness application:
- FNBN will input the Lender and SBA loan number on your application. You may leave those 2 lines blank.
- Read all directions on the application carefully
- Only fully completed applications with supporting documents will be accepted.
- Please email questions to PPP@fnbnorth.com
As of June 16, 2020 SBA issued a revised 3508 forgiveness application and a new 3508EZ forgiveness application. Please complete the applicable forgiveness application (Only one application type is required).
Form 3508EZ applies to borrowers who meet any one of these three criteria:
- Applied for the PPP loan as self-employed, an independent contractor or a sole proprietor with no employees.
- Did not reduce salary or wages for any employee by more than 25%, and did not reduce the number or hours of their employees (excepting laid-off employees who refused an offer to return).
- Did not reduce salary or wages for any employee by more than 25% during the covered period and experienced reductions in business activity as a result of Federal health directives related to COVID-19.
3 Steps for application submittal:
- Save the Loan Forgiveness application to your computer before filling it out
- Resave after completion
- Upload the Loan Forgiveness application securely using the form below along with the required supporting documents
Submitting application without supporting documents will delay processing.
PPP Loan Forgiveness Document Upload
Documentation Guidance for PPP Forgiveness
Documentation verifying the eligible payroll compensation and benefit payments from the Covered Period or the Alternative Payroll Covered Period consisting of each of the following:
- Payroll Compensation (salary, wages, commissions, or net earnings from self-employment):
- Bank account statements or third-party payroll service provider reports documenting the amount of compensation paid to employees. Third-party payroll service provider reports do not include payroll reports created by the Borrower using excel or QuickBooks, but are from an outside company such as ADP, Paycom, etc; AND
- Tax forms, including IRS Form 941 and state quarterly business and individual employee wage reporting and unemployment insurance tax filings reported to the relevant state, for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period.
Benefit Payment Documentation:
- Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans (IRAs/401Ks) that the Borrower wants to include in the forgiveness amount.
Owner-employees and self-employed individuals’ payroll calculation:
The loan forgiveness amount available for owner-employees and self-employed individuals’ own payroll compensation for a 24-week Covered Period, this amount is capped at $20,833 (the 2.5-month equivalent of $100,000 per year) for each individual or the 2.5-month equivalent of their applicable compensation in 2019, whichever is lower. For an 8-week Covered Period, this amount is capped at 8/52 of 2019 compensation (up to $15,385).
Specifically, the loan for the following borrowers are subject to the caps listed below:
- Owner-employees are capped by the amount of their 2019 employee cash compensation and employer retirement and health care contributions made on their behalf.
- Schedule C filers are capped by the amount of their owner compensation replacement, calculated based on 2019 net profit.
- General partners are capped by the amount of their 2019 net earnings from self-employment (reduced by claimed section 179 expense deduction, unreimbursed partnership expenses, and depletion from oil and gas properties) multiplied by 0.9235.
The SBA further clarified that no additional forgiveness is available for retirement or health insurance contributions for self-employed individuals, including Schedule C filers and general partners, since those expenses are paid out of their net self-employment income.
Documentation showing one of the following (The selected time period must be the same time period selected for purposes of completing PPP Schedule A, line 11 on the Borrower Forgiveness Application at the election of the Borrower):
- The average number of FTE employees on payroll per month employed by the Borrower between February 15, 2019 and June 30, 2019, OR
- The average number of FTE employees on payroll per month employed by the Borrower between January 1, 2020 and February 29, 2020, OR
- In the case of a seasonal employer, the average number of FTE employees on payroll per month employed by the Borrower between February 15, 2019 and June 30, 2019; between January 1, 2020 and February 29, 2020; OR any consecutive twelve week period between May 1, 2019 and September 15, 2019.
- EZ Form-see application instructions for FTE documentation
Alternative Payroll covered period may only be used for calculating covered payroll costs. Non payroll costs follow the covered period which begins the day your loan was closed/disbursed.
Business Mortgage Interest Payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; OR lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments.
Business Rent or Lease Payments: Copy of current lease agreement and receipts, cancelled checks, bank account statement verifying eligible payments from the Covered Period; or lease account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.
Business Utility Payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.
The following are all considered forgivable utilities expenses for the PPP:
- Water Bill
- Internet Bill
Per SBA - For any size of PPP loan, the SBA may at any time undertake a review of the loan at the SBA’s discretion.
All records relating to the Borrower’s PPP loan, including documentation submitted with its PPP loan application, documentation supporting the Borrower’s certifications as to the necessity of the loan request and its eligibility for a PPP loan, documentation necessary to support the Borrower’s loan forgiveness application, and documentation demonstrating the Borrower’s material compliance with PPP requirements. The Borrower must retain all such documentation in its files for SIX YEARS after the date the loan is forgiven or repaid in full, and permit authorized representatives of SBA, including representatives of its Office of Inspector General, to access such files upon request.