What Documents Do You Need for PPP Loan Forgiveness?
If you’re hoping to have your PPP loan forgiven, you’ll need to make sure you have all the right documentation in order. Here’s what you’ll need to have on hand.
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If you received a Paycheck Protection Program (PPP) loan, you may be eligible for loan forgiveness. The U.S. Small Business Administration (SBA) will forgive loans if you use the proceeds for eligible expenses and maintain your employee headcount and salary levels.
To apply for forgiveness, you’ll need to submit a Loan Forgiveness Application to your lender. You’ll also need to include supporting documentation, which may include:
-Proof of payment for eligible expenses
-Canceled checks or receipts
-Tax forms (e.g., IRS Form 941)
-Employment verification forms (e.g., W-2s, 1099s)
Your lender will have detailed instructions on what documentation they require. If you have any questions about the process, please consult with your lender or an SBA representative.
What is the PPP Loan Forgiveness Program?
The PPP Loan Forgiveness Program is a federal program that provides small businesses with financial assistance during the COVID-19 pandemic. The program is administered by the Small Business Administration (SBA) and is available to businesses that have applied for and received a Paycheck Protection Program (PPP) loan.
Under the program, businesses can receive loan forgiveness for certain expenses that they incurred during the covered period. To be eligible for loan forgiveness, businesses must use the loan proceeds for eligible purposes, such as payroll costs, rent, utilities, and mortgage interest.
To apply for loan forgiveness, businesses must submit a request to their lender along with supporting documentation. Documentation requirements vary depending on how the business spent the loan proceeds. For example, businesses that spent the loan proceeds on payroll costs must submit documentation verifying those costs, such as payroll tax filings or bank statements.
The SBA will review the business’s application and supporting documentation to determine whether the business meets all of the requirements for loan forgiveness. If approved, the SBA will forgive a portion of the business’s PPP loan balance. Businesses that do not receive full loan forgiveness may still be eligible for partial forgiveness.
What Documents Do You Need for PPP Loan Forgiveness?
To apply for forgiveness of your PPP loan, you (the borrower) must complete and submit a Loan Forgiveness Application to your lender. You will also need to submit certain documentation in support of your application for forgiveness.
The SBA has created a Forgiveness Platform that includes aForgiveness Application Formand detailed instructions on how to complete the form and supporting documentation.
The following table provides an overview of the information and documentation you will need to complete your Loan Forgiveness Application:
-How you calculated the number of full-time equivalent (FTE) employees.
-How you spent the loan proceeds.
– The total amount of payroll costs incurred during the Covered Period or Alternative Payroll Covered Period.
– The amount of any eligible cash tip equivalents received by employees during the Covered Period or Alternative Payroll Covered Period.
– Documentation verifying the eligible cash tip equivalents received by employees during the Covered Period or Alternative Payroll Covered Period.
Documents Needed (based on how you spent your loan proceeds):
-Payroll Reports – to verify eligible payroll costs incurred during the covered period or alternative payroll covered period, including: Employer’s profit and loss statement if you are self-employed or an independent contractor Documents from your accountant supporting your FTE employee headcount for each pay period falling within the covered period or alternative payroll covered period A comparison of your reported FTE employee levels for previous tax years (e.g., 2019) with those reported for each pay period within the covered period or alternative payroll covered period State employment reports filed with unemployment agencies
Nonpayroll Reports – to verify eligible nonpayroll expenses incurred during the covered period, including: Bank account statements canceling checks or providing evidence of payment Rent/mortgage lease agreement Interest rate statements from lenders Utility bills from service providers
If applicable, documentation confirming faculty and staff were employed at an educational institution on February 15, 2020 If applicable, documentation supporting that business activities were suspended due to orders from a governmental entity limiting commerce, travel, group meetings due to COVID–19
How to Apply for PPP Loan Forgiveness
If you’ve received a Paycheck Protection Program (PPP) loan, you may be eligible for loan forgiveness if you use the loan for eligible expenses and meet certain requirements.
To apply for forgiveness, you’ll need to fill out and submit the Loan Forgiveness Application Form to your lender. You’ll also need to include supporting documentation, which may include:
-Canceled checks or bank statements
-Evidence of payments made to employees
-Rent or mortgage payment receipts
Your lender will have more information on what supporting documentation they require. You can find more information on PPP loan forgiveness on the SBA website.
If you are hoping to receive loan forgiveness for your PPP loan, you will need to complete and submit a forgiveness application to your lender. This application must include documentation proving that you used the loan funds for eligible expenses, as well as any other required supporting documentation. Be sure to check with your lender to see what specific documents they require.