How to Get PPP Loan Forgiveness

If you’re a small business owner who took out a Paycheck Protection Program (PPP) loan, you may be wondering if you can get it forgiven. Here’s what you need to know.

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Check If You’re Eligible

The first step is to check if your business is eligible for loan forgiveness. You can do this by looking at the list of eligible expenses below. If your business spent money on any of these things in the eight weeks after you got your loan, you might be able to have some or all of your loan forgiven.

-Payroll costs
-Rent
-Utilities
-Interest on mortgage obligations incurred before February 15, 2020
-Covered operational expenses
-Covered property damage costs
-Covered supplier costs
-Worker protection expenditures

Gather the Required Documentation

In order to apply for PPP loan forgiveness, you will need to complete and submit the SBA Form 3508. This form requires extensive documentation, so it’s important to start gathering the required materials as soon as possible. You will need the following:

-Your PPP loan forgiveness application
-Your most recent tax return
-Documentation of eligible payroll costs, such as:
-Payroll reports from your accounting software
– bank statements or third-party payroll service reports
– Forms 941 and state quarterly payroll reports
– Documentation of eligible non-payroll costs, such as:
– Rent or mortgage interest payments
– Utility payments
-Proof of payment, such as cancelled checks or bank statements

Submit Your Application

After you’ve gathered all the required documentation, you’ll need to submit your application for PPP loan forgiveness to your lender. The SBA has a fillable PDF form that you can use, or you can use your lender’s forgiveness application form (if they have one).

Be sure to include all required documentation with your application, as incomplete applications will not be processed. Review the list of what’s required before you get started:

-Completed and signed PPP Loan Forgiveness Application Form
-Documentation verifying the number of employees on payroll and pay rates, such as:
-Payroll reports from your payroll provider
-Payroll tax filings reported to the IRS
-Tax forms (or equivalent third-party payroll documents)
-W-2 forms for each employee
-Documentation verifying eligible mortgage interest, rent or lease payments, such as:
Canceled checks, payment receipts or bank statements

Wait for a Decision

After submitting your forgiveness application, you’ll need to wait for a decision from your lender. The lender has 90 days to review and approve your application, and the SBA has an additional 90 days to review it. If the SBA needs more time, they’ll notify you and your lender in writing.

What to Do If You’re Not Eligible

If you don’t think you’re eligible for PPP loan forgiveness, there are a few other options:

– You can repay the loan in full. You have up to 10 years to repay the loan, and you’ll have a fixed interest rate of 4%.
– You can apply for deferment or forbearance. This will allow you to temporarily stop making payments or reduce your monthly payment. interest will continue to accrue during this time.
– You can negotiate with your lender. If you can’t afford the monthly payments, you may be able to negotiate a new repayment plan with your lender.

What to Do If You’re Denied

If you believe you’ve been wrongfully denied for PPP loan forgiveness, you can appeal the decision. The SBA will review your application and supporting documentation and make a determination. You will be notified in writing of the SBA’s decision. If you are still not satisfied, you can request a review by an independent SBA Loan Ombudsman.

There are a few other options available if you are denied forgiveness or are unable to repay your loan. You may be eligible for loan restructuring or modification through your lender. You can also file for bankruptcy protection, although this should be considered a last resort.