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How to request for PPP forgiveness and the steps involved!

Want to know how to get your PPP fully forgiven? Well, you are in the right place.

When it comes to PPP, we’re all aware that it’s a forgivable loan. And obtaining a PPP and applying forgiveness on a PPP is not difficult; all we have to do is determine whether we are eligible for a PPP loan and then follow the STEPS on how to get forgiveness on the PPP that we have obtained.

However, when new guidelines for obtaining your PPP loans forgiven emerge, you might have some doubts (and concerns) regarding the procedure.

I know what you truly want, is to have your PPP forgiven completely, correct? To begin, you need to be aware that completely forgiving your PPP is not difficult if you follow these simple steps.

  • Document everything (Every expense, employee details etc.)
  • Use it for the eligible expenses (The expenses that are allowed on a PPP)
  • Maintaining the number of employees on your payroll
  • Maintain a minimum of 75% of each employee’s overall salary
  • Always keep your lender in touch (Stay tuned)
  • The 60% rule (Payroll expenditures must account for at least 60% of your loan)
  • Apply for loan forgiveness

Document Everything

Ensure that you document everything from the minute you receive your PPP, regardless of how small the expense was, and that you keep any invoices and receipts from the transactions secure and available at all times.

NOTE: When it comes to PPP loan forgiveness, no document is too little.

Use It for Eligible Expenses

Your eligibility to apply for a fully forgiveness on a PPP will be obtained only if you spend your PPP on,

  • Payroll – salary, wage, parental, medical, or sick leave, health benefits etc.
  • Utilities – if the service started before February 15, 2020
  • Rent – the lease agreement must be signed prior to February 15, 2020.
  • Property damage expenses – any expenditures incurred in 2020 as a result of public disturbances that are not covered by insurance.
  • Mortgage interest – the mortgage must be signed prior to February 15, 2020
  • Worker safety expenditures – any personal protective equipment or property upgrades required to be COVID compliant beginning March 1, 2020
  • Expenditures for operations – software, cloud computing, and accounting requirements including human resources requirements.
  • Supplier costs—any purchase order or goods order placed prior to getting a PPP loan that is necessary for operations.

Maintain The Number of Employees on Your Payroll

PPP loan forgiveness will be reduced by the SBA depending on your average FTE staff decrease. Here’s how to figure out how much your PPP loan forgiveness decrease will be for FTEs.

Maintain A Minimum of 75% of Each Employee’s Overall Salary

If the employee’s salary over the next 24 weeks is less than 75% of their most recent quarter’s pay, the amount eligible for forgiveness will be decreased by the difference between their current pay and 75% of the original payment.

Always Keep Your Lender in Touch

When requesting forgiveness, keeping in touch with your lender is important, and you should do so from the day you apply to the day you request forgiveness.

This is crucial due to the modifications that could be made on the PPP and PPP forgiveness processes, and be sure to inquire about the documents required to obtain forgiveness.

The 60% rule

Simply put, this means that 60 percent of the total loan amount must be paid on payrolls.

60%: Payroll costs:

  • Salaries, commissions, bonuses, or hazard pay ($100,000 gross earnings per employee)
  • Employee benefits
  • Compensation is subject to state and municipal taxes.

40%: non-payroll costs:

  • Interest on mortgages
  • Rent
  • Operation costs
  • Utilities
  • Covered operations expenses
  • Covered property damage like vandalism
  • Worker protection expenses

Apply for loan forgiveness

1.      Select the form you prefer

There are a few different forms you can use to request PPP forgiveness, depending on your preference.

You can use Form 3508, the SBA’s Loan Forgiveness Application, or your lender’s version. If you fulfill the qualifying requirements, you may be eligible to use Form 3508EZ or Form 3508S.

Submit the form to your lender after filling it out and adding any relevant documents.


2.      Attach the supporting documents.

Your lender may have extra paperwork requirements, but you may need documents that prove the following:

  • Payroll costs during the loan period
  • The average number of full-time employees on the payroll
  • Payments for non-payroll expenses

The documents you bring with you that illustrate this information include:

  • Payroll reports indicating how much money was paid to employees.
  • Records of accounting
  • Payroll tax filings
  • Receipts

(This is where the documentation gets handy.)

Consult the Loan Forgiveness Application forms for further information on the documents needed by the SBA. Consult your lender for further information on the documents that your lender requires, and you are ready.

So, let’s not overthink the PPP loan forgiveness procedure; instead, let’s get the forgiveness to our PPP today!

Let’s also share this article with others who might find it valuable.

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