How Do I Make Sure My PPP Loan Is Forgiven?
If you’re wondering how to make sure your PPP loan is forgiven, you’re not alone. With so many changes and updates to the program, it can be hard to keep track of what you need to do. But don’t worry, we’re here to help.
In this blog post, we’ll cover everything you need to know about PPP loan forgiveness, including what documentation you need to submit and when. We’ll also give you some tips on how to increase your
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Eligibility
You must use at least 60% of your PPP loan for payroll costs. Payroll costs include:
Check the size of your business
The Paycheck Protection Program (PPP) is a loan designed to help small businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.
To be eligible for a PPP loan, your business must:
-Be a small business with 500 or fewer employees
-Have been in operation on February 15, 2020
-Have experienced a decrease in revenue of 25% or more due to the pandemic
Determine if you have employees
If you have employees, you will need to determine if they are eligible for the PPP loan. The SBA has provided guidelines on who is eligible for the PPP loan.
To be eligible, employees must:
-Be a U.S. citizen, permanent resident, or other eligible non-citizen
-Have worked for you for at least two weeks prior to receiving a covered injury or illness
-Have been employed by you at the time of the covered injury or illness
-Not besubstantially similar in duties to another employee who makes more than $100,000 per year
Consider your business type
The Paycheck Protection Program is a lifeline for small businesses during the COVID-19 pandemic.
The program, which is administered by the Small Business Administration, provides low-interest loans that can be used to cover payroll and other expenses.
But in order to have the loan forgiven, businesses must meet certain criteria.
First, businesses must consider their business type. Businesses that are sole proprietorships, independent contractors and self-employed individuals are eligible for the program.
Other businesses that are eligible for the program include:
-Partnerships
-Limited liability companies
-Corporations
-Not-for-profit organizations
businesses must also have 500 or fewer employees to be eligible for the program.
Loan Forgiveness
The PPP loan forgiveness process is still being finalized by the SBA, but there are some things you can do now to make sure your loan is forgiven. First, you’ll need to use the loan for eligible expenses, which include payroll costs, mortgage interest, rent, and utilities. You’ll also need to maintain or rehire employees and pay their salary at least 75% of what it was before the pandemic. Finally, you’ll need to submit documentation to your lender showing how you’ve used the loan.
Use the loan for eligible expenses
To have your loan forgiven, you must use it for eligible expenses, which include payroll costs, rent, mortgage interest, or utility payments. You will need to provide documentation of these expenses to your lender. You can find more information on eligible expenses here:
https://www.sba.gov/document/support--table-list-of-eligible-ppp-expenses
Keep records of your expenses
To ensure your loan is forgiven, you will need to keep records of your expenses. These records can include receipts, invoices, bank statements, and payroll records. You will need to submit these records to your lender when you apply for loan forgiveness.
Submit a Loan Forgiveness Application
To apply for loan forgiveness, borrowers will need to complete and submit the Loan Forgiveness Application form (SBA Form 3508) to their lender. Borrowers should not submit this form to the SBA.
The form provides instructions on how to calculate the amount of the loan that may be eligible for forgiveness. Borrowers must submit supporting documentation with their Loan Forgiveness Application, which may include:
-Payroll reports
-Payroll tax filings
-Income and revenue statements
-Banking records
-Proof of any other payments made from other sources specifically for eligible expenses
If a borrower used the proceeds of their PPP loan for ineligible purposes, they will not be eligible for loan forgiveness. However, if they have already repaid some or all of their PPP loan, they will not be required to repay any amount that has already been spent on ineligible purposes.
What If My Loan Is Not Forgiven?
The Paycheck Protection Program (PPP) loan forgiveness process is still being finalized by the Small Business Administration (SBA), but there are some things you can do to prepare for loan forgiveness and to ensure that your loan will be forgiven. However, if your loan is not forgiven, you will still be responsible for repaying the loan.
Refinance your PPP loan
If you’re not able to have your PPP loan forgiven, you may be able to refinance your PPP loan through the Small Business Administration’s 7(a) Loan Program. You can also explore other options for refinancing your debt.
Apply for an SBA Economic Injury Disaster Loan
If your loan is not forgiven, you can apply for an SBA Economic Injury Disaster Loan (EIDL). EIDLs are low-interest loans of up to $2 million that can be used to cover operating expenses that your business has been unable to pay because of the pandemic.
To apply for an EIDL, visit the SBA’s website and fill out an application. You will need to provide some basic information about your business, including your tax ID number, business name, and contact information. You will also need to provide a detailed description of how the pandemic has impacted your business.
Once you have submitted your application, the SBA will review it and determine whether you are eligible for an EIDL. If you are approved, you will be able to use the loan proceeds to cover a variety of operating expenses, including payroll, rent, utilities, and inventory.
You can find more information about EIDLs on the SBA’s website.
