Paycheck ​Protection Program Loan Forgiveness 

Loan Forgiveness FAQs

PPP loan proceeds are to be used over the 8 week “covered period” immediately after the loan is made to cover:

  • eligible payroll costs
  • business-related mortgage interest, rent, and utility costs

To obtain the maximum forgiveness amount:

  • The eligible payroll costs should equal at least 60% of the Potential Forgiveness Amount
  • Eligible non-payroll costs should equal no more than 40% of the Potential Forgiveness Amount
  • Employee and compensation levels must be maintained.
  • Payments to an independent contractor
  • Cash compensation in excess of $100,000
  • The employer’s share of federal payroll taxes

Along with the Loan Forgiveness Application Form # 3508, or # 3508EZ, whichever is applicable, PPP loan recipients will need to submit:

  • Documentation verifying payroll compensation and benefits during the covered period
    • Includes third party payroll service records and 941 payroll tax filings reports
    • Payment receipts documenting employer paid health insurance and retirement plan benefits as applicable
  • Documentation such as cancelled checks or account statements verifying allowable business expenses during the covered period
    • Includes business mortgage interest payments
    • Business rent or lease payments
    • Business utility payments
  • Other related documentation as required for any adjusted forgiveness regarding reductions in FTE and or Salary levels

The SBA Loan Number and the Lender Loan Number are one and the same and can be found towards the top of the original loan documents the Borrower signed.

A borrower may submit a loan forgiveness application any time on or before the maturity date of the loan – including before the end of the Covered Period – if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness. If the borrower does not apply for loan forgiveness within 10 months after the last day of the Covered Period, the PPP loan is no longer deferred and the borrower must begin paying principal and interest.

The first day of the Covered Period is the date that the SBA PPP Loan Fund proceeds were disbursed into your account also known as the PPP Loan Disbursement Date.

Loan Forgiveness Application Form

STEPS TO COMPLETE & SUBMIT FORM AND DOCUMENTATION:

  1. Gather, scan and save supporting documentation verifying:
    • payroll compensation/benefits
    • allowable business expenses
    • if applicable, other documents related to reductions in FTE and salary levels
  2. Next:
    A. If your business:
    • Did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered Period  

     AND

    • Did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period.

Open the fillable, Simplified/EZ Forgiveness Form, review the instructions and then:

    1. First, save it on your computer as ‘PPP Forgiveness Form’. You may also want to include the name of your business/organization in the document name (EX: PPP Forgiveness Form – XYZ Company)
    2. Fill in the form that you have saved and, when finished, re-save it.

       B. If your business does not meet the requirements for the Simplified Forgiveness Form:

Open the fillable Standard Forgiveness Form, review the instructions and then:

    1. First, save it on your computer as ‘PPP Forgiveness Form’. You may also want to include the name of your business/organization in the document name (EX: PPP Forgiveness Form – XYZ Company)
    2. Fill in the form that you have saved and, when finished, re-save it.

3. Attach your completed Forgiveness Form, along with the supporting documentation noted above, in an email addressed and sent to: PPPLoans@bankoflabor.com   

Questions? Please call your Account Officer or email PPPLoans@bankoflabor.com