COVID-19 Guide for Your Business

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.

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 Covered 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 Forms 3508S, 3508EZ and the full 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. 

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.

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%

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

Yes.

Yes, your eligibility shouldn’t be affected by this.  See FAQ 10 for the acceptable documents

• 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 Covered 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 Forms 3508S, 3508EZ and the full 3508.

According to the SBA’s Instructions for PPP Schedule A, the following payroll costs are eligible for Forgiveness if incurred during the Covered or Alternative Payroll Covered Periods: 

• Employer contributions for employee health insurance, including employer contributions to a self-insured, employer-sponsored group health plans
• Employer contributions to employee retirement plans, including pension plans
• Employer state and local taxes assessed on employee compensation (e.g., state unemployment insurance tax)

The following are not eligible for Forgiveness: 

• Employee contributions -- either pre-tax or after-tax -- to health insurance and/or retirement plans
• Employer contributions made on behalf of a self-employed individual, general partners, or owner-employees of an S-corporation, because such payments are already included in their compensation
• Any taxes withheld from employee earnings

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.

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

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

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.

• 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.

You should submit all documents showing you’ve met FTE, payroll and/or non-payroll guidelines for the full amount that you’re requesting Forgiveness. This means you may need to submit documents for multiple reporting periods. For example, to show payroll costs across multiple quarters, you may need to submit 2 or 3 quarterly filings of IRS Form 941s, state quarterly business and individual employee wage reports, or unemployment insurance tax filings.

No.

If the documents you submit to support your Forgiveness request include your DBA or Tradename, you must submit additional documents to show the connection between that name and the legal name of your business.

Yes, you must upload them with your supporting documents.

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

Yes. There is no prepayment penalty.

The SBA indicated it will reduce your maximum Forgiveness amount by your EIDL advance of up to $10,000. If the SBA deducts the EIDL advance amount, you’re responsible for repaying the EIDL advance amount plus the interest that has accrued on your EIDL loan advance from the day you received your PPP loan funds, in addition to any part of your PPP loan that is not forgiven. Interest will continue to accrue until your loan is paid off. 

During the Forgiveness process, we will ask you if you received an EIDL advance.

The SBA may provide further guidance on EIDL advances. Visit SBA.gov or Treasury.gov for the latest updates on this program.

Yes, you can request Forgiveness and two major factors set by the SBA will be 1) changes of compensation during your Covered Period and 2) Average FTE during your Covered Period divided by Average FTE during your chosen reference period.

If you have a PPP loan of $50,000 or less, you may be eligible to use Form 3508S.  This allows you to make fewer calculations and be exempt from reductions in loan Forgiveness amounts based on reductions in Full-time Equivalent (FTE) employees or salary or hourly wages.  However, if you and your affiliates have PPP loans totaling $2 million or more, you can’t use the new form. We will let you know when we are ready to begin accepting requests with Form 3508S, likely early in the new year. In the meantime, please refer to the SBA’s new Form 3508S on SBA.gov.

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.

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. 

If you are using either the full Form 3508 or 3508EZ, your loan Forgiveness amount 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.

If you are using Form 3508S, you are exempt from any reductions in your loan Forgiveness amount based on reductions in full-time equivalent (FTE) employees or in salaries or wages.

• If you are using either the full Form 3508 or 3058EZ, the FTE Reduction Exceptions may apply to you if: 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.

If you are using Form 3508S, you are exempt from any reductions in your loan Forgiveness amount based on reductions in full-time equivalent (FTE) employees or in salaries or wages.

If using the full Form 3508 or 3508EZ, the rules may 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. 

It depends on whether your transaction or series of transactions will constitute a “change of ownership.” 

A “change of ownership” will be considered to have occurred if:

(1) at least 20 percent of the common stock or other ownership interest of a PPP borrower (including a publicly traded entity) is sold or otherwise transferred, whether in one or more transactions (in aggregate since the date of loan origination), including to an affiliate or an existing owner of the entity

(2) a PPP borrower sells or otherwise transfers at least 50 percent of its assets (measured by fair market value), whether in one or more transactions, or

(3) a PPP borrower is merged with or into another entity.

No “change of ownership” = No approval required.  If your transaction or series of transactions will not result in a “change of ownership” as described above, then neither JPMorgan Chase nor SBA approval is required.

A “change of ownership” = Approval required.  If your transaction or series of transactions will result in a “change of ownership” as described above, JPMorgan Chase or SBA approval is required as follows:

• If the change in ownership is comprised of the sale or other transfer of 20-50% of the common stock or other ownership interest of the PPP borrower (and the PPP borrower will not be merged with or into another entity), then Chase approval is required (but establishment of a funded escrow and prior submission of Forgiveness application will not typically be required).
• If the change in ownership is comprised of (a) the sale or other transfer of more than 50% of the common stock or other ownership of the PPP borrower, (b) the sale of 50% or more of the PPP borrower’s assets (measured by fair market value), or (c) the merger of the PPP borrower with or into another entity, then either JPMorgan Chase or SBA approval is required. 
  • JPMorgan Chase Approval: As a condition to obtaining JPMorgan Chase approval (in accordance with SBA requirements) you will be required to, among other things, (i) establish and fund an escrow account at JPMorgan Chase in an amount equal to the outstanding loan balance (including interest) and (ii) immediately apply for Forgiveness.
  • SBA Approval: In lieu of obtaining JPMorgan Chase approval, you may request approval from the SBA.  The SBA may take up to 60 days to review such request and the request could be denied. The approval request must include a reason why the PPP borrower cannot repay the loan or establish a funded escrow account (as described above) prior to the change of ownership.  SBA may impose additional requirements.
  • You can avoid the need for JPMorgan Chase or SBA approval altogether if you are able to reduce your PPP loan balance to $0 (by obtaining Forgiveness and/or repaying their loan) prior to the change of ownership. 

No, you may be required to take additional steps such as establishing an escrow account.

If an escrow account is required, it must be established with JPMorgan Chase.

Please contact your banker if you’d like to process the change of ownership, and we’ll assist you with an escrow account.

It will vary, depending on factors such as whether an escrow account is required.

We’ll allow only one authorized representative of a company listed on the account to request Forgiveness. It does not have to be the same person who applied for the loan.

Once a representative starts a Forgiveness request online, they will be the only one who can edit, sign and submit the request, and receive status notifications.

No. Businesses that received a PPP loan need to request Forgiveness through the bank that processed their loan.

We continue to invite all customers with a PPP loan to request Forgiveness, generally starting with those who received funding first and who are ready to submit using SBA Form 3508EZ or 3508.

We expect to start processing the simpler SBA Form 3508S online early in the new year.  So you may choose to wait for that or proceed with either Form 3508EZ or 3508, depending on your situation. In either case, we recommend completing the Forgiveness checklist now.

Please remember you have plenty of time to request Forgiveness.

• If you submit a complete Forgiveness request within 10 months after the end of your Covered Period, you don’t have to make a payment until the SBA makes a decision and remits a payment, if any.
• If you don’t submit a complete Forgiveness request within 10 months after the end of the Covered Period, you will need to start making payments.

Interest began to accrue the day you received your PPP funds. If the SBA forgives any part of your loan, it will forgive the associated accrued interest, too. You need to start making payments after your deferral period ends -- 10 months after your chosen 8-week or 24-week Covered Period -- or when the SBA makes a decision and remits a payment, if any.

You have until your current loan maturity date to request Forgiveness, but your payments will begin after you deferral period ends.

Yes, however, please consult your counsel or advisors for implications of doing so.

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

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

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. To view these documents, click here > Latest Updates >  “Document your eligible payroll and non-payroll costs”.

You can use Form 3508S if you meet these two criteria below:

• Received a PPP loan of $50,000 or less, AND
• Together with your affiliates, didn’t receive PPP loans totaling $2 million or more.

We expect to start processing the simpler SBA Form 3508S online early in the new year. So you may choose to wait for that or proceed with either Form 3508EZ or 3508, depending on your situation when you receive the invitation email.

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.

No, you will be able to request Forgiveness up until your loan maturity date, according to SBA guidance. The SBA indicated it plans to update the October 31, 2020 expiration date on the forms.

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. 

Yes, regardless of which Form you use. You’ll need to fill out tables 1 and 2 of the worksheet to help calculate your payroll costs, but you should not upload the worksheet.

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.

• All PPP borrowers, individually or together with their affiliates, that received PPP loans with an original principal amount of $2 million or greater.
• Some PPP borrowers with loan amounts of less than $2 million, when required by the SBA.

We will email you if the SBA issues a request to complete the Loan Necessity Questionnaire and/or Notice of Review for your PPP loan. You must return all requested information to us within 10 business days. 

See FAQ 53 for more information.  You may want to contact your accountant, attorney or other trusted advisors to assist in completion.

We'll send you an email when we've sent your request to the SBA and when the SBA has made a decision. After you submit a complete request to us, it may take up to 60 days to review. Then we will send your request to the SBA, which may take up to an additional 90 days to review and authorize. Actual times will vary.

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.

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

Yes. You will have the opportunity to extend your current 2-year loan term to 5 years if:

• the Small Business Administration (SBA) has made a decision on your Loan Forgiveness request and
• you have an outstanding balance

Once that happens, you’ll receive an email from JPMorgan Chase via DocuSign to electronically sign a new note.

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. 

Yes, as long as the SBA’s detailed appeal process – which was posted on August 11 -- is followed.  For details, visit Treasury.gov under Program Rules -- Interim Final Rule on Appeals of SBA Loan Review Decisions (8.11.2020).

No. The new legislation confirms that the lender is only responsible for paying fees when it directly contracts with the agent.

Loan Forgiveness for the Paycheck Protection Program

We continue to invite clients with a PPP loan to request Forgiveness, generally starting with those who received funding first.

The Small Business Administration has created the simpler Form 3508S for smaller PPP Loans. If you have a loan that is $50,000 or less, you can wait for us to incorporate the 3508S requirements, likely early in the new year, or use Form 3508EZ or 3508 once you receive your email invitation. In either case, we recommend you complete the Forgiveness checklist now.

Continue to check this page for updates and visit SBA.gov and Treasury.gov for full program details.

You can request Forgiveness with SBA Form 3508S if you meet these two criteria below:

• Received a PPP loan of $50,000 or less, AND
• Together with your affiliates, didn’t receive PPP loans totaling $2 million or more.

You can request Forgiveness with SBA Form 3508EZ if you meet at least one of the three criteria below:

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
  • 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.

Loan Forgiveness for the Paycheck Protection Program

We continue to invite clients with a PPP loan to request Forgiveness, generally starting with those who received funding first.

The Small Business Administration has created the simpler Form 3508S for smaller PPP Loans. If you have a loan that is $50,000 or less, you can wait for us to incorporate the 3508S requirements, likely early in the new year, or use Form 3508EZ or 3508 once you receive your email invitation. In either case, we recommend you complete the Forgiveness checklist now.

Continue to check this page for updates and visit SBA.gov and Treasury.gov for full program details.

On October 8 2020, the Small Business Administration (SBA) released the simpler Form 3508S for borrowers who received a PPP Loan of $50,000 or less.  Borrowers who qualify may make fewer calculations and be exempt from reductions in loan Forgiveness amounts based on reductions in Full-time Equivalent (FTE) employees or salary or hourly wages.

If you have a loan that is $50,000 or less, you can wait for us to incorporate the 3508S requirements, likely early in the new year, or use Form 3508EZ or 3508 once you receive your email invitation. In either case, we recommend you complete the Forgiveness checklist now.

Note that if you and your affiliates have PPP loans totaling $2 million or more, you cannot use Form 3508S

If you want to request Forgiveness before the Form 3508S is incorporated, you must decide whether to use Form 3508EZ or 3508.

Loan Forgiveness for the Paycheck Protection Program

We continue to invite clients with a PPP loan to request Forgiveness, generally starting with those who received funding first.

The Small Business Administration has created the simpler Form 3508S for smaller PPP Loans. If you have a loan that is $50,000 or less, you can wait for us to incorporate the 3508S requirements, likely early in the new year, or use Form 3508EZ or 3508 once you receive your email invitation. In either case, we recommend you complete the Forgiveness checklist now.

Continue to check this page for updates and visit SBA.gov and Treasury.gov for full program details.

Loan Forgiveness for the Paycheck Protection Program

We continue to invite clients with a PPP loan to request Forgiveness, generally starting with those who received funding first.

We’re working to get the simpler Form 3508S into our Forgiveness request process because it may help those of you with loans of $50,000 or less, though it’s still some weeks away. As a reminder, Form 3508S requires fewer calculations, and borrowers who qualify to use this form are exempt from reductions in loan Forgiveness amounts based on reductions in FTE employees or salary/hourly wages. If you have a loan that is $50,000 or less, you can wait for us to incorporate the 3508S requirements or use Form 3508EZ or 3508 once you receive your email invitation.

To prepare any Forgiveness request, we encourage you to review our helpful resources below.

Continue to check this page for updates and visit SBA.gov and Treasury.gov for full program details.

SBA PPP - LOAN FORGIVENESS FAQS

Guidance for questions concerning requesting Forgiveness from the SBA Paycheck Protection Program

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

What to Document

What to Prepare

Loan Forgiveness and Your Employees

Loan Forgiveness and Change of Ownership

Requesting Loan Forgiveness

What to Expect After Requesting Forgiveness