COVID-19 Guide for Your Business

Tables 1 and 2 of the Schedule A Worksheet on Form 3508 -- on pages 3 and 4 -- may help you calculate your payroll costs.

• The total annual amount of cash compensation eligible for Forgiveness may not exceed $100,000 per employee. So if you’re using the 8-week Covered Period, you can receive Forgiveness for no more than $15,385 per employee. If you’re using the 24-week period, you can receive Forgiveness for no more than $46,154 per employee.
• For an owner-employee, self-employed individual, or general partner using the 8-week Covered Period, eligible compensation is capped at $15,385 per individual or the 8-week equivalent of their applicable compensation in 2019, whichever is lower. If using the 24-week Covered Period, eligible compensation is capped at $20,833 per individual or the 2.5-month equivalent of their applicable compensation in 2019, whichever is lower.

Owner compensation limits are the same for both Form 3508EZ and full Form 3508.

The Loan Forgiveness Form 3508 Instructions for Borrowers has information on Average FTE calculations on page 4 that may help.

If you meet one of these two rules, then you may be exempt from any loan forgiveness reduction based on a reduction in your FTE employee levels:

FTE Reduction Safe Harbor 1:

If in good faith, you are able to document that you were unable to operate between February 15, 2020, and the end of the Covered Period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19.

FTE Reduction Safe Harbor 2:

· You reduced your FTE employee levels in the period beginning February 15, 2020, and ending April 26, 2020; AND

· You then restored your FTE employee levels by not later than December 31, 2020 to your FTE employee levels in the pay period that included February 15, 2020.

Verifying the eligible cash compensation and non-cash benefits payments from the Covered Period or the Alternative Payroll Covered Period:

• Bank statements or third-party payroll provider reports noting cash compensation paid to employees
• Payroll tax forms (typically IRS Form 941) showing employee wages, tips, and other compensation
• State quarterly tax forms
• Cancelled checks or bank statements documenting employer contributions to health insurance and retirement plans

Verifying the existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period.

• For business utilities:
  • Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.
• For business rent or lease:
  • Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.
• For business mortgage interest:
  • 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. 

Documents supporting the average number of FTE employees (not required if you don’t have employees) during the Covered Period or Alternative Payroll Covered Period and reference period. Documents may include:

• Payroll tax forms (typically IRS Form 941) showing employee wages, tips and other compensation.
• State quarterly tax forms.
• Individual employee wage reporting.
• Unemployment insurance tax filings reported.

• Familiarize yourself with the SBA Loan Forgiveness Form 3508EZ Instructions to understand if you can use Form 3508EZ.
  
• You are not required to complete Form 3508EZ or 3508 before starting your online Forgiveness request. You will need to provide this information when requesting Forgiveness through the JPMorgan Chase portal.
• If Form 3508 applies, then you must complete the PPP Schedule A Worksheet before requesting Forgiveness.
• If you have a payroll provider, request a payroll report from them.

The SBA does not require a separate account. 

Businesses that received a PPP loan need to request Forgiveness through the bank that processed their loan. If you received a PPP loan through us, you’ll work with us to submit your Forgiveness request as well. We will keep you informed as we get additional SBA guidance and notify you when it’s time to submit.

No. You must request Forgiveness through the JPMorgan Chase online portal.

Under current SBA guidance:

• You must use at least 60% of funds for eligible payroll costs to qualify for full loan forgiveness, down from 75%
• You can use up to 40% of funds for eligible non-payroll costs, up from 25%

The Covered Period is either:

• The 24-week (168-day) period beginning on the PPP Loan Disbursement Date, or
• The 8-week (56-day) period beginning on the PPP Loan Disbursement Date if you received your PPP loan before June 5, 2020, and elect to use an eight-week (56-day) Covered Period. 

For example, if you are using a 24-week Covered Period and received your PPP loan proceeds on Monday, April 20, the first day of the Covered Period is April 20 and the last day of the Covered Period is Sunday, October 4.

The Covered Period cannot extend beyond December 31, 2020. 

It’s an additional choice for companies that have a biweekly (or more frequent) payroll schedule. You can always choose the Covered Period.

For loans funded before June 5, 2020:

• You may elect to calculate eligible payroll costs using either:
  • the 24-week (168-day) period that begins on the first day of your first pay period following their PPP Loan Disbursement Date 
  • the  eight-week (56-day) period) that begins on the first day of your first pay period following their PPP Loan Disbursement Date.

For loans funded on June 5, 2020 or later:

You  may elect to calculate eligible payroll costs using the 24-week (168-day) period that begins on the first day of your first pay period following their PPP Loan Disbursement Date.

For example,  if you are using a 24-week Alternative Payroll Covered Period and received its PPP loan proceeds on Monday, April 20, and the first day of its first pay period following its PPP loan disbursement is Sunday, April 26, the first day of the Alternative Payroll Covered Period is April 26 and the last day of the Alternative Payroll Covered Period is Saturday, October 10.

If you elect to use any Alternative Payroll Covered Period, you must:

• Apply the Alternative Payroll Covered Period wherever there is a reference in this application to “the Covered Period or the Alternative Payroll Covered Period.”

However, you must apply the Covered Period -- not the Alternative Payroll Covered Period -- wherever there is a reference in this application to “the Covered Period” only. The Alternative Payroll Covered Period cannot extend beyond December 31, 2020.

It begins on the date loan funds were deposited into your account -- look for the ACH credit for SMALL BUSINESS N/A CREDIT PPD in your transaction history. If using the Alternative Payroll Covered Period, it starts the first day of your first pay period following your loan disbursement date.

You need to use the funds within the Covered Period or Alternative Covered Period. 

Yes, for the portion that meets all the SBA rules and if the SBA approves your request for Forgiveness.

Based on the latest SBA announcements, you may be eligible for partial Forgiveness. However, since you can only request Forgiveness once, it would be beneficial to use all of your funds before requesting Forgiveness. 

Payroll costs consist of compensation to your employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees; and for an independent contractor or sole proprietor, wages, commissions, income, or net earnings from self-employment, or similar compensation. 

You are generally eligible for payroll costs paid and payroll costs incurred during the Covered Period or Alternative Payroll Covered Period. Payroll costs are considered:

• Paid on the day that paychecks are distributed or you originate an ACH credit transaction or
• Incurred on the day that your employees’ pay is earned

The SBA has shared the following guidance on what Payroll documents will be needed to verify the eligible cash compensation and non-cash benefit payments from the Covered Period or the Alternative Payroll Covered Period consisting of each of the following:

• Bank account or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.
• Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period:
  • Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
  • State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.

Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that you included in the forgiveness amount.

The selected time period must be the same time period selected for purposes of completing PPP Schedule A, line 11.

• The average number of FTE employees on payroll per week you employed between February 15, 2019 and June 30, 2019;
• The average number of FTE employees on payroll per week you employed 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 week you employed between February 15, 2019 and June 30, 2019; between January 1, 2020 and February 29, 2020; or any consecutive 12-week period between May 1, 2019 and September 15, 2019. 

Documents may include payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941) and state quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported. Documents submitted may cover periods longer than the specific time period.

• 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 or cancelled checks verifying eligible payments from the Covered Period; or lessor 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.

No. However, mortgage interest payments do qualify as a non-payroll cost.

Yes.

It may be reduced if your average weekly FTE employees during the Covered Period or Alternative Payroll Covered Period was less than during your chosen reference period and doesn’t meet Full-time Equivalency (FTE) Reduction Safe Harbor rules.

It exempts you from the Loan Forgiveness reduction based on FTE employee levels if you document:

• Any positions for which you made a good-faith, written offer to rehire an individual who was an employee on February 15, 2020 and you were unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020;
• Any positions for which you made a good-faith, written offer to restore any reduction in hours, at the same salary or wages, during the Covered Period or the Alternative Covered Period and the employee rejected the offer, and
• Any employees who during the Covered Period or the Alternative Payroll Covered Period
  • Were fired for cause
  • Voluntarily resigned,
  • Voluntarily requested and received a reduction of their hours. In all of these cases, include these FTEs on this line only if the position was not filled by a new employee. 

They apply if you meet either Safe Harbor 1 or 2: 

FTE Reduction Safe Harbor 1: In good faith, you are able to document that you were unable to operate between February 15, 2020, and the end of the Covered Period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19.

FTE Reduction Safe Harbor 2:

• You reduced your FTE employee levels in the period beginning February 15, 2020, and ending April 26, 2020; AND
• You then restored your FTE employee levels by not later than December 31, 2020 to your FTE employee levels in the pay period that included February 15, 2020. 

If you added to your FTE employment levels and maintained similar salary and wage levels, it should not affect your ability to request Forgiveness. 

You must submit answers from PPP Loan Forgiveness Calculation Form and PPP Schedule A. The Schedule A Worksheet will help you complete the PPP Schedule A. 

You must submit eligible payroll and non-payroll costs on the SBA Form 3508EZ.  You may choose to submit the PPP Borrower Demographic Information Form. 

You may be able to use Form 3508EZ if you:

• Are self-employed and have no employees; or
• Did not reduce the salaries or wages of your employees by more than 25%, and did not reduce the number or hours of your 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 your employees by more than 25%.

Otherwise, you may have to use Form 3508.

We will pre-fill your standard business information, as well as:

• SBA PPP Loan Number
• JPMorgan Chase PPP Loan Number
• Funded PPP Loan Amount
• PPP Loan Disbursement Date

It could take up to five months for us and the SBA to review most complete applications, actual times will vary. You won't have to start making payments until the SBA provides a decision on your request or remits the funds.

You may be forgiven for all, some or none of your loan. You must repay the principal and interest amount of the unforgiven portion of your loan. 

 Yes. There is no prepayment penalty.

For loans made before June 5, the maturity is two years.  For loans funded on or after June 5, the maturity is five years. 

We will provide an update at a later date. 

Yes – if the borrow does not own the property, they need to submit a rent or lease agreement. 

The SBA states the below categories are eligible if service began before February 15, 2020:

• phone
•  internet
• gas
• water
• electricity
•  transportation

Please visit SBA.gov or Treasury.gov for any updates.

An EIDL grant – in amounts up to $10,000 -- is not refinanced by a PPP Loan. It will cause the SBA to reduce the amount of the PPP Loan eligible for Forgiveness. 

No

The SBA, in its discretion, may undertake a review at any time including after Forgiveness has been approved.  A borrower must retain PPP documentation for six years after the date the loan is forgiven or repaid in full.

No

Yes, so long as at least 60% of the funds requested for Forgiveness are used for eligible payroll costs and no more than up to 40% of funds requested for Forgiveness are used for eligible non-payroll costs. 

JPMorgan Chase cannot provide any consent without SBA approval for change of ownership nor can we provide guidance on how this will affect eligibility for Forgiveness.

• Borrowers that don’t meet the 3508EZ criteria can use the updated PPP Loan Forgiveness Form 3508.

• Here are additional updates from the SBA that apply to both PPP Loan Forgiveness Application Forms:  
  • You now have a 24-week Covered Period to spend loan funds starting the date loan funds were deposited into your account. If you were funded prior to June 5, you can still use the 8-week period and Alternative Payroll Covered Period.
  • You must use at least 60% of funds for eligible payroll costs to qualify for full Loan Forgiveness.
  • You can use up to 40% of funds for eligible non-payroll costs.
  • Payments are generally deferred until 10 months after your 8-week or 24-week Covered Period ends.
    • If you apply for Forgiveness in the deferral period, you won’t have to start making payments on unforgiven amounts until the SBA provides a decision on your request or remits funds.
    • If you do not apply for Forgiveness within the deferral period, you must begin making payments after your deferral period.

Before you request Loan Forgiveness, we recommend you do the following: 

Document your eligible payroll and non-payroll costs

• Your documentation should cover your payroll and non-payroll costs incurred or paid during your Covered Period or your Alternative Payroll Covered Period.

Below are the document types you may need to retain or submit when requesting Forgiveness through JPMorgan Chase. The documents required may differ depending on if you are using Form 3508EZ or 3508. For a complete list of documentation required, please see the Loan Forgiveness Application Instructions for Borrowers for Form 3508EZ and 3508. 

We’ll email you when you can request Loan Forgiveness through JPMorgan Chase.  Please keep in mind:

• Forgiveness is not automatic, you must request it through JPMorgan Chase.
• For Chase Connect users, you will be able to sign into the forgiveness portal using your Chase Connect account. For non-Chase Connect users, you will be able to register for a forgiveness account in the portal.
• You should request Forgiveness only after you have spent all the funds that are eligible for Forgiveness.  
• We will pre-fill your standard business information on your Forgiveness request as well as:
  • SBA PPP Loan Number
  • JPMorgan Chase PPP Loan Number
  • Funded PPP Loan Amount
  • PPP Loan Disbursement Date
•  You will need to certify and document that you used the loan funds for SBA-eligible purposes.
• You’ll be able to check your Forgiveness status online after you submit your request.
• Once the SBA makes a decision, we’ll email you.

It is your obligation, as the borrower, to understand the SBA's rules. Other eligibility requirements may apply.

We continue to incorporate the latest SBA guidance and expect to start accepting online PPP Forgiveness requests no sooner than mid-August. We’ll email you when you can begin to request Forgiveness.

Please check back on this page for updates and visit SBA.gov and Treasury.gov for program details.

• Borrowers that don’t meet the 3508EZ criteria can use the updated PPP Loan Forgiveness Form 3508.

• Here are additional updates from the SBA that apply to both PPP Loan Forgiveness Application Forms:  
  • You now have a 24-week Covered Period to spend loan funds starting the date loan funds were deposited into your account. If you were funded prior to June 5, you can still use the 8-week period and Alternative Payroll Covered Period.
  • You must use at least 60% of funds for eligible payroll costs to qualify for full Loan Forgiveness.
  • You can use up to 40% of funds for eligible non-payroll costs.
  • Payments are generally deferred until 10 months after your 8-week or 24-week Covered Period ends.
    • If you apply for Forgiveness in the deferral period, you won’t have to start making payments on unforgiven amounts until the SBA provides a decision on your request or remits funds.
    • If you do not apply for Forgiveness within the deferral period, you must begin making payments after your deferral period.

Before you request Loan Forgiveness, we recommend you do the following: 

Document your eligible payroll and non-payroll costs

• Your documentation should cover your payroll and non-payroll costs incurred or paid during your Covered Period or your Alternative Payroll Covered Period.

Below are the document types you may need to retain or submit when requesting Forgiveness through JPMorgan Chase. The documents required may differ depending on if you are using Form 3508EZ or 3508. For a complete list of documentation required, please see the Loan Forgiveness Application Instructions for Borrowers for Form 3508EZ and 3508. 

We’ll email you when you can request Loan Forgiveness through JPMorgan Chase.  Please keep in mind:

• Forgiveness is not automatic, you must request it through JPMorgan Chase.
• For Chase Connect users, you will be able to sign into the forgiveness portal using your Chase Connect account. For non-Chase Connect users, you will be able to register for a forgiveness account in the portal.
• You should request Forgiveness only after you have spent all the funds that are eligible for Forgiveness.  
• We will pre-fill your standard business information on your Forgiveness request as well as:
  • SBA PPP Loan Number
  • JPMorgan Chase PPP Loan Number
  • Funded PPP Loan Amount
  • PPP Loan Disbursement Date
•  You will need to certify and document that you used the loan funds for SBA-eligible purposes.
• You’ll be able to check your Forgiveness status online after you submit your request.
• Once the SBA makes a decision, we’ll email you.

It is your obligation, as the borrower, to understand the SBA's rules. Other eligibility requirements may apply.

Small Business Administration (SBA)
Paycheck Protection Program Update on Loan Forgiveness

We continue to incorporate the latest SBA guidance and expect to start accepting online PPP Forgiveness requests no sooner than mid-August. We’ll email you when you can begin to request Forgiveness.

Please check back on this page for updates and visit SBA.gov and Treasury.gov for program details.

• Borrowers that don’t meet the 3508EZ criteria can use the updated PPP Loan Forgiveness Application Form 3508.

• Here are additional updates from the SBA that apply to both PPP Loan Forgiveness Application Forms:  
  • You now have a 24-week Covered Period to spend loan funds starting the date loan funds were deposited into your account. If you were funded prior to June 5, you can still use the 8-week period and Alternative Payroll Covered Period.
  • You must use at least 60% of funds for eligible payroll costs to qualify for full Loan Forgiveness.
  • You can use up to 40% of funds for eligible non-payroll costs.
  • Payments are generally deferred until 10 months after your 8-week or 24-week Covered Period ends.
    • If you apply for Forgiveness in the deferral period, you won’t have to start making payments on unforgiven amounts until the SBA provides a decision on your request or remits funds.
    • If you do not apply for Forgiveness within the deferral period, you must begin making payments after your deferral period.

Before you request Loan Forgiveness, we recommend you do the following: 

Document your eligible payroll and non-payroll costs

• Your documentation should cover your payroll and non-payroll costs incurred or paid during your Covered Period or your Alternative Payroll Covered Period.

Below are the document types you may need to retain or submit when requesting Forgiveness through JPMorgan Chase. The documents required may differ depending on if you are using Form 3508EZ or 3508. For a complete list of documentation required, please see the Loan Forgiveness Application Instructions for Borrowers for Form 3508EZ and 3508. 

Here are a few things you can do to prepare for Loan Forgiveness.

• Familiarize yourself with the SBA’s Checklist for Using SBA Form 3508EZ to understand if the 3508EZ form or the 3508 form applies to your Forgiveness request.
• You are not required to complete the 3508EZ or 3508 form before starting your online Forgiveness request, you will provide this information when requesting Forgiveness through the JPMorgan Chase portal.
• If the 3508 form applies, then you must complete the PPP Schedule A Worksheet before requesting Forgiveness.
• If you have a payroll provider, request a payroll report from them.
• The information below may help answer questions about how to calculate your payroll costs: 

We’ll email you when you can request Loan Forgiveness through JPMorgan Chase.  Please keep in mind:

• Forgiveness is not automatic, you must request it through JPMorgan Chase.
• For Chase Connect users, you will be able to sign into the forgiveness portal using your Chase Connect account. For non-Chase Connect users, you will be able to register for a forgiveness account in the portal.
• You should request Forgiveness only after you have spent all the funds that are eligible for Forgiveness.  
• We will pre-fill your standard business information on your Forgiveness request as well as:
  • SBA PPP Loan Number
  • JPMorgan Chase PPP Loan Number
  • Funded PPP Loan Amount
  • PPP Loan Disbursement Date
•  You will need to certify and document that you used the loan funds for SBA-eligible purposes.
• You’ll be able to check your Forgiveness status online after you submit your request.
• Once the SBA makes a decision, we’ll email you.

Payments are generally deferred until 10 months after your 8-week or 24-week Covered Period ends.

• If you apply for Forgiveness in the deferral period, you won’t have to start making payments on unforgiven amounts until the SBA provides a decision on your request or remits funds.
• If you do not apply for Forgiveness within the deferral period, you must begin making payments after your deferral period.

It is your obligation, as the borrower, to understand the SBA's rules. Other eligibility requirements may apply.

• Borrowers that don’t meet the 3508EZ criteria can use the updated PPP Loan Forgiveness Application Form 3508.
• Here are additional updates from the SBA that apply to both PPP Loan Forgiveness Application Forms:
  • You now have a 24-week Covered Period to spend loan funds starting the date loan funds were deposited into your account. If you were funded prior to June 5, you can still use the 8-week period and Alternative Payroll Covered Period.
  • You must use at least 60% of funds for eligible payroll costs to qualify for full Loan Forgiveness.
  • You can use up to 40% of funds for eligible non-payroll costs.
  • Payments are generally deferred until 10 months after your 8-week or 24-week Covered Period ends.
    • If you apply for Forgiveness in the deferral period, you won’t have to start making payments on unforgiven amounts until the SBA provides a decision on your request or remits funds.
    • If you do not apply for Forgiveness within the deferral period, you must begin making payments after your deferral period.

Before you request Loan Forgiveness, we recommend you do the following: 

Document your eligible payroll and non-payroll costs

• Your documentation should cover your payroll and non-payroll costs incurred or paid during your Covered Period or your Alternative Payroll Covered Period.

Below are the document types you may retain or submit when you request Forgiveness through JPMorgan Chase.

Here are a few things you can do to prepare for Loan Forgiveness.

• Familiarize yourself with the SBA’s Checklist for Using SBA Form 3508EZ to understand if the 3508EZ form or the 3508 form applies to your Forgiveness request.
• You are not required to complete the 3508EZ or 3508 form before starting your online Forgiveness request, you will provide this information when requesting Forgiveness through the JPMorgan Chase portal.
• If the 3508 form applies, then you must complete the PPP Schedule A Worksheet before requesting Forgiveness.
• If you have a payroll provider, request a payroll report from them.
• The information below may help answer questions about how to calculate your payroll costs: 

We’ll email you when you can request Loan Forgiveness through the JPMorgan Chase portal.  Please keep in mind:

• Forgiveness is not automatic, you must request it through JPMorgan Chase.
• For Chase Connect users, you will be able to sign into the forgiveness portal using your Chase Connect account. For non-Chase Connect users, you will be able to register for a forgiveness account in the online portal.
• You should request Forgiveness only after you have spent all the funds that are eligible for Forgiveness. 
• We will pre-fill your standard business information on your Forgiveness request as well as:
  • SBA PPP Loan Number
  • JPMorgan Chase PPP Loan Number
  • Funded PPP Loan Amount
  • PPP Loan Disbursement Date
• You will need to certify and document that you used the loan funds for SBA-eligible purposes.
• You’ll be able to check your Forgiveness status online after you submit your request.
• Once the SBA makes a decision, we’ll email you.

It is your obligation, as the borrower, to understand the SBA's rules. Other eligibility requirements may apply.

• The SBA is making it easier for some businesses to request Paycheck Protection Program (PPP) Loan Forgiveness with both a new 3508EZ application form and a revised 3508. The SBA published a new PPP Loan Forgiveness Application Form (3508EZ) for borrowers that:

1. Are self-employed and have no employees
2. Did not reduce the salaries or wages of your employees by more than 25% and did not reduce the number or hours of your employees
3. Experienced reductions in business activity as a result of health directives related to COVID-19 and did not reduce the salaries or wages of your employees by more than 25%

• We recommend you review the SBA’s Checklist for Using SBA Form 3508EZ.
• Borrowers that don’t meet the 3508EZ criteria can use the updated PPP Loan Forgiveness Application Form 3508.
• Here are additional updates from the SBA that apply to both PPP Loan Forgiveness Application Forms:
  • You now have a 24-week Covered Period (if you were funded prior to June 5, you can still use the 8-week period and Alternative Payroll Covered Period) to spend loan funds starting the date loan funds were deposited into your account. 
  • You must use at least 60% of funds for eligible payroll costs to qualify for full Loan Forgiveness, down from 75%.
  • You can use up to 40% of funds for eligible non-payroll costs, up from 25%.
  • If you request Forgiveness, you won't have to start making payments until the SBA makes a decision or remits the funds. 
  • If you don’t request Forgiveness, you will have to start making payments within 10 months after the end of the Covered Period.

Before you request Loan Forgiveness, we recommend you do the following: 

Document your eligible payroll and non-payroll costs

• Your documentation should cover your payroll and non-payroll costs incurred or paid during your Covered Period or your Alternative Payroll Covered Period.

Below are the document types you may retain or submit when you request Forgiveness through JPMorgan Chase.

Here are a few things you can do to prepare for Loan Forgiveness.

• Familiarize yourself with the SBA’s Checklist for Using SBA Form 3508EZ to understand if the 3508EZ form or the 3508 form applies to your Forgiveness request.
• You are not required to complete the 3508EZ or 3508 form before starting your online Forgiveness request, you will provide this information when requesting Forgiveness through the JPMorgan Chase online portal.
• If the 3508 form applies, then you must complete the PPP Schedule A Worksheet before requesting Forgiveness.  
• If you have a payroll provider, request a payroll report from them.
• The information below –may help answer questions about how to calculate your payroll costs: 

We’ll email you when you can request Loan Forgiveness through JPMorgan Chase.  Please keep in mind:

• Forgiveness is not automatic, you must request it through JPMorgan Chase.
• We’ll let you know in our weekly email when the updated SBA PPP Loan Forgiveness Application is available so you can fill out the PPP Schedule A Worksheet to prepare.
• You will be able to sign into the forgiveness portal using your Chase Connect account. If you do not have a Chase Connect account, you will be able to register for an account in the portal.
• We will pre-fill your standard business information on your Forgiveness request as well as:
  • SBA PPP Loan Number
  • PPP Loan Number
  • Funded PPP Loan Amount
  • PPP Loan Disbursement Date
• You will need to certify and document that you used the loan funds for SBA-eligible purposes.
•  We’ll email you to notify you when the status of your application changes. If we have questions, we will contact you.
• You won't have to start making payments until the SBA provides a decision on your request or remits the funds.  It could take up to five months for us and the SBA to review most complete applications, actual times will vary.

It is your obligation, as the borrower, to understand the SBA's rules. Other eligibility requirements may apply.

We'll email you when you can submit your request. If you’ve received funding through the SBA’s Paycheck Protection Program (PPP), you may be eligible to request Forgiveness. We know that Forgiveness is important to you and your business and that you have questions. 

Updated information from the SBA:

• The SBA has indicated that they will be updating its Paycheck Protection Program Loan Forgiveness Application [Form 3508]. We outline some of the anticipated changes below:
  • You now have up to 24 weeks – previously 8 weeks – to spend loan funds in the Covered Period. If you’d like, you can still use the 8-week period.
    • The Covered Period begins from the date of loan disbursement – the date loan funds were deposited into your account.
  • You must use at least 60% of funds for eligible payroll costs to qualify for full loan forgiveness, down from 75%.
  • You can use up to 40% of funds for eligible non-payroll costs, up from 25%.
  • If you apply for Forgiveness, you won't have to start making payments on unforgiven amounts until the SBA makes a decision or remits the funds.
  • If you don’t apply for Forgiveness, you won’t have to start making payments until 10 months after the 24-week Covered Period ends.
  • You may be able to use FTE Safe Harbor provisions if you have fewer full-time equivalent (FTE) employees now if you document an inability to:
    • Rehire individuals who were employees as of February 15, 2020
    • Hire similarly qualified employees for unfilled positions on or before December 31, 2020
    • Return to the same level of business activity before February 15, 2020 due to compliance with requirements or guidance from the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration from March 1, 2020 through December 31, 2020, related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19
• The SBA will likely update its PPP Schedule A Worksheet that you’ll use in your online Forgiveness request process.

Information from the SBA on how to prepare for Forgiveness:

• The information below is accurate as of May 22, unless otherwise noted. We will update when we receive guidance from the SBA:

• The SBA provided the Paycheck Protection Program Loan Forgiveness Application
  
• For a detailed list of documentation you’ll need to submit (page 10), click the plus sign below:

Requesting Loan Forgiveness through JPMorgan Chase

• Forgiveness is not automatic, you must request it through JPMorgan Chase.
• We'll provide you a timetable for Forgiveness requests as we get guidance from the SBA.
• We’ll email you when you can request Forgiveness online. 
  • We will pre-fill the following information on your request:
    • SBA PPP Loan Number
    • PPP Loan Number
    • Funded PPP Loan Amount
    • PPP Loan Disbursement Date
• You will need to certify and document that you used the loan funds for SBA-eligible purposes.
• You’ll be able to check your Forgiveness status online – we aren’t sure yet how long the SBA will need to authorize your request.
• Once the SBA makes a decision, we’ll email you.
• It is your obligation, as the borrower, to understand the SBA's rules. Other eligibility requirements may apply.

The Small Business Administration (SBA) has updated its guidance on Loan Forgiveness. Please check back on this page for updates.

If you’ve received funding through the SBA’s Paycheck Protection Program (PPP), you may be eligible to request Forgiveness. We know that Forgiveness is important to you and your business and that you have questions.

Updated information from the SBA on how to prepare for Forgiveness:

• The SBA provided the Paycheck Protection Program Loan Forgiveness Application
• We recommend you familiarize yourself with this document because it will be used during the online Forgiveness request process. It includes: 
  
  • Giving businesses with bi-weekly or more frequent payroll schedules the option to use an “alternative payroll covered period” (page 1). 
  • Clarifying that eligible payroll costs are incurred when employees’ pay is earned (page 2). 
  • PPP Loan Forgiveness Calculation Form (page 3).
  • PPP Schedule A to calculate payroll costs (page 6).
  • Clarifying that a reduction in full-time equivalency (FTE) employees could affect your Forgiveness amount (pages 7-8).

• For a  detailed list of documentation you’ll need to submit (page 10), click the plus sign below:

The SBA has extended its deadline until May 14 for companies that want to pay their loan in full after reviewing the updated guidance on eligibility and economic need.

We continue to work hard to administer the Paycheck Protection Program for our customers. If you have a PPP loan, we want to be sure you see new guidance from the SBA and Treasury as you consider your loan, application or certifications. Please note for PPP loans funded, borrowers will likely be required to make the same certifications of eligibility as a condition of forgiveness.

The new guidance strengthens some of the language regarding qualifications for a Paycheck Protection Program loan. More specifically, it clarifies the “current economic uncertainty” requirement that borrowers must meet to apply for a loan. In view of the new guidance, we would like to remind you:

1. When you applied you certified that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”

Also, upon reviewing the new guidance (set forth below),

1. You have the opportunity to withdraw your application if you do not feel you meet this criteria.
2. If you’ve already been funded, and you believe you do not meet this criteria, you can repay your loan by May 14, 2020, and the SBA will treat that repayment as being in good faith.

Here is the additional eligibility information provided by the U.S. Department of the Treasury (Treasury) and/or the Small Business Administration for Paycheck Protection Program (PPP) loans:

• Hedge funds and private equity firms are not eligible for PPP loans, and many private equity portfolio companies are likely not eligible for PPP loans.
• Businesses owned by private companies with adequate sources of liquidity to support the business’s ongoing operations are not eligible for PPP loans.

Read the important information above before you make any decisions. Please be sure to read the FAQ shown in its entirety and, if necessary, consult with your counsel or advisor.

Update April 29, 2020: 

If you have received funding through the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), you may be eligible to request loan forgiveness. We know that loan forgiveness is important to you and your business and that you have questions. Please view more details on loan forgiveness below or Find the latest information at SBA.gov and Treasury.gov.

Update April 23, 2020:

SBA PPP Loans are subject to new guidance. Learn the rules of the program.

The SBA issued a new FAQ #31 on April 23, 2020, which applies to existing borrowers, as well as those in the application process. The FAQ provides guidance on what it means to certify that: “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”

Please be sure to read FAQ #31 shown below in its entirety and, if necessary, consult with your counsel or advisor.

47. Question: An SBA interim final rule posted on May 8, 2020 provided that any borrower who applied for a PPP loan and repays the loan in full by May 14, 2020 will be deemed by SBA to have made the required certification concerning the necessity of the loan request in good faith. Is it possible for a borrower to obtain an extension of the May 14, 2020 repayment date?

Answer: Yes, SBA is extending the repayment date for this safe harbor to May 18, 2020, to give borrowers an opportunity to review and consider FAQ #46. Borrowers do not need to apply for this extension. This extension will be promptly implemented through a revision to the SBA’s interim final rule providing the safe harbor.

46. Question: How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?

Answer: When submitting a PPP application, all borrowers must certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA, in consultation with the Department of the Treasury, has determined that the following safe harbor will apply to SBA’s review of PPP loans with respect to this issue: Any borrower that, together with its affiliates20, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.

SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans. This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees. In addition, given the large volume of PPP loans, this approach will enable SBA to conserve its finite audit resources and focus its reviews on larger loans, where the compliance effort may yield higher returns.

Importantly, borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance. SBA has previously stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by SBA for compliance with program requirements set forth in the PPP Interim Final Rules and in the Borrower Application Form. If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request. SBA’s determination concerning the certification regarding the necessity of the loan request will not affect SBA’s loan guarantee.

20 For purposes of this safe harbor, a borrower must include its affiliates to the extent required under the interim final rule on affiliates, 85 FR 20817 (April 15, 2020).

43. Question: FAQ #31 reminded borrowers to review carefully the required certification on the Borrower Application Form that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA guidance and regulations provide that any borrower who applied for a PPP loan prior to April 24, 2020, and repays the loan in full by May 7, 2020, will be deemed by SBA to have made the required certification in good faith. Is it possible for a borrower to obtain an extension of the May 7, 2020 repayment date?

Answer: SBA is extending the repayment date for this safe harbor to May 14, 2020. Borrowers do not need to apply for this extension. This extension will be promptly implemented through a revision to the SBA’s interim final rule providing the safe harbor. SBA intends to provide additional guidance on how it will review the certification prior to May 14, 2020.

Please remember that you also certified you understood that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable under the law, including under 18 USC 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to $250,000; under 15 USC 645 by imprisonment of not more than two years and/or a fine of not more than $5,000; and, if submitted to a federally insured institution, under 18 USC 1014 by imprisonment of not more than thirty years and/or a fine of not more than $1,000,000.   

The Treasury, SBA and the media have been focused on PPP loans and issues around borrower eligibility. 

Throughout this process, we have relied on your certifications regarding eligibility. Federal agencies, legislators and media have been focused on PPP loans, including borrower eligibility.  If you do not currently believe that your business is eligible for PPP funding (even if you’ve previously certified as to eligibility on your PPP loan application), you should consider taking action now. Please note that we anticipate that when applying for PPP loan forgiveness, borrowers will be required to make the same or similar certifications as to eligibility as those made during the application process.

If you have received PPP funding and now feel you may not be eligible: The Treasury and SBA have indicated that your prior certification as to eligibility will be deemed to have been made in good faith if you repay your PPP loan in full by May 14, 2020. To arrange for repayment by the May 14th deadline, please contact your banker no later than May 11th.

31. Question: Do businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?

Answer: In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application. Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant.” Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification. 

Lenders may rely on a borrower’s certification regarding the necessity of the loan request. Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020, will be deemed by SBA to have made the required certification in good faith.