PPP Covered Period

4 things to know

You have plenty of time to request Forgiveness, but we want you to keep the following things in mind:

  1. The SBA has provided clarity on who can use the simpler 3508EZ form to request Forgiveness. Check out the criteria below.
  2. Forgiveness isn’t necessarily all or nothing. You may be eligible for all, some, or no Forgiveness on your loan.
  3. Request Forgiveness only after you have spent all the funds that are eligible for Forgiveness.
  4. Payments are generally deferred until 10 months after your 8-week or 24-week Covered Period ends.

What form to use?

The Checklist for using SBA Form 3508EZ clarifies who can use the simpler form to request Forgiveness. You must meet one of these three criteria:

  • 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 of employees or hours of your employees OR
  • Did not reduce the salaries or wages of your employees by more than 25% and did experience reductions in business activity as a result of health directives related to COVID-19.  Business activity reductions could have resulted directly or indirectly from compliance with COVID Requirements or Guidance from federal, state or local government shutdown orders that prohibited you from maintaining the same Full Time Equivalency (FTE) employee levels.

Here is a link to the 3508EZ Form.

Borrowers that don’t meet the 3508EZ criteria can use the updated PPP Loan Forgiveness Application Form 3508.

Additional things to know

Here are additional updates from the SBA that apply to both PPP Loan Forgiveness Application Forms:

  • You now have a 24-week Covered Period to spend loan funds starting the date loan funds were deposited into your bank account. If you were funded prior to June 5, you can still use the 8-week period and Alternative Payroll Covered Period.
  • You must use at least 60% of funds for eligible payroll costs to qualify for full Loan Forgiveness.
  • You can use up to 40% of funds for eligible non-payroll costs.
  • Payments are generally deferred until 10 months after your 8-week or 24-week Covered Period ends.
  • If you apply for Forgiveness in the deferral period, you won’t have to start making payments on unforgiven amounts until the SBA provides a decision on your request or remits funds, or the deferral period ends.
  • If you do not apply for Forgiveness within the deferral period, you must begin making payments after your deferral period.

Next Steps

Before you apply for PPP Loan Forgiveness, we suggest you:

  1. Decide what is going to be your Covered Period per the rules (is it going to be 8 weeks or 24 weeks? Will it start with the funding date or a later date?)
  2. Let us know your chosen Covered Period.  We’ll then create custom reports to help you come up with FTE and compensation numbers for the application. Fill out this form to get in our queue.
  3. Gather the non-payroll documents you will submit with your forgiveness application.

We will provide your data in Excel so you can customize your reports per your bank’s requirements. Once the sheets are ready, we’ll post them on your Sharefile folder as usual.

Remember, we have hundreds of these to do, and they need to be done one by one, so  we appreciate your patience while we work through our list.